Ending Food Subsidies: Nutritional, Welfare, and Budgetary Effects

Governments faced with growing budget deficits are cutting manysocial expenditures, including costly food subsidy programsthat have provided benefits to the rich and poor alike. Becausethe poor spend a larger share of their income on food than dothe rich, however, such cuts usually have negative distributional,welfare and nutritional effects. This article discusses themethodological issues in estimating the effects of price andtax reforms in developing countries. I apply a model that Deaton(1988) developed to estimate price elasticities from cross-sectiondata, the only reliable and detailed data available in mostdeveloping countries. I use measures of both real income andnutrition to evaluate the effects of changes in the Moroccanfood subsidy program. The analysis suggests that subsidies oninferior foods not consumed by the wealthy would reduce thewelfare costs to the poor and limit the budgetary expendituresrequired.     

政府补贴对地区生产率的影响评估

本文采用广义倾向评分匹配(GPSM)方法,更为严谨地分析了政府补贴强度对地区生产率的影响.研究结果发现:(1)我国的地方政府更倾向于补贴技术创新水平更高或更具技术创新潜力的地区.同时,地方政府的补贴强度还受到政府支出的制约;(2)政府补贴强度与地区生产率之间呈现显著的"倒U型"非线性关系,即当政府的补贴强度小于临界值时,政府补贴能够显著地促进地区生产率的提升,而当政府补贴强度大于这一临界值时,政府补贴对地区生产率会产生显著的抑制作用.进一步分析影响机制发现,政府补贴能够通过提高集约边际下地区间的资源配置效率,进而提升地区的生产率,但同时也会通过抑制二元边际下地区间的资源配置效率而对地区生产率产生不利的影响.总的来看,在政府补贴强度较低时,政府补贴的正效应大于负效应,而当政府补贴强度超过其临界值时,政府补贴的负效应将更加明显.     

The effect of leverage on the tax-cut versus investment-subsidy argument

Two common methods of attracting corporate investment are investment incentives and tax incentives. It is important to use the two incentives in the correct proportions, otherwise the government will give up too much value in the process of attracting investment. This paper examines the effect of tax cut and investment subsidy on the government's net benefit from a project. Earlier studies concluded that it was optimal to use only investment subsidy and no tax cuts. We show that this is not true when debt financing is possible, and it is generally optimal (from the government's perspective) to use a combination of tax reduction and investment subsidy. The optimal tax rate and optimal investment subsidy are identified and analyzed in the paper. It is shown that using a sub-optimal combination of incentives can result in substantial reduction of benefits for the government.     

Housing,mortgage bailout guarantees and the macro economy

What are the macroeconomic and distributional effects of government bailout guarantees for Government Sponsored Enterprises (e.g., Fannie Mae)? A model with heterogeneous, infinitely lived households and competitive housing and mortgage markets is constructed to evaluate this question. Households can default on their mortgages via foreclosure. The bailout guarantee is a tax-financed mortgage interest rate subsidy. Eliminating this subsidy leads to a large decline in mortgage origination and increases aggregate welfare by 0.5% in consumption equivalent variation, but has little effect on foreclosure rates and housing investment. The interest rate subsidy is a regressive policy: it hurts low-income and low-asset households.     

Adverse Selection and the Capped Premium Subsidy in the Federal Employees Health Benefits Program

This article examines the relationship between adverse selection and the capped premium subsidy in the Federal Employees Health Benefit Program (FEHBP). Understanding this relationship is important, not only because the FEHBP is the largest employer‐sponsored health program in the United States, but also because it has been proposed as a market‐based model for the reform of both Medicare and the market for nongroup private coverage. We present a theoretical model of the FEHBP that we then test using enrollee data. In particular, we exploit the natural experiment that arises from variation in the premium subsidy cap across Metropolitan Statistical Areas (MSAs). Although the nominalsubsidy cap is constant across MSAs, its real value varies greatly across MSAs with different price levels. The empirical analysis herein supports the contention that the premium subsidy in the FEHBP helps reduce adverse selection.     

The impact of implied facilities cost of money subsidies on capital expenditures and the cost of debt in the defense industry

We examine the public policy effects of a cash flow subsidy unique to the government contracting industry, on defense contractors’ capital expenditures and cost of debt over a relatively long time-period, 1978–2009. Because the Department of Defense found evidence of a shrinking defense industrial base in the early 1970s, it wanted to encourage capital spending by defense firms. The result was a cost accounting standard that reimbursed contractors for an imputed facilities capital cost of money (FCCOM) that has remained in effect, virtually unchanged, for almost 30 years, despite structural changes in the defense industry. Our results, using a sample of 628 defense firms, suggest that the standard met its intended objective of increased capital spending within 10 years of its promulgation. However, we also find that the FCCOM subsidy may have contributed to a decreased cost of debt within the defense sector over the long-term. Finally, further analyses indicate that the long-term persistence of this subsidy may have encouraged defense contractors to overinvest in capital goods. Our findings suggest that public policy makers should consider both direct and indirect effects of regulation embedded in accounting standards.     

Welfare to Work,Wages and Wage Growth*

This paper attempts to uncover the effects of a UK welfare‐to‐work programme on individual wage growth by exploiting an expansion to this welfare programme. The conventional wisdom is that such programmes trap recipients into low‐wage, low‐quality work – this comes from the simple argument that the ‘poverty trap’, which a wage subsidy for low‐income workers induces, reduces the benefits to investments, such as on‐the‐job training, and so reduces wage growth. In fact, a wage subsidy will also reduce the costs of, at least, general training because we would normally expect workers to pay for their own general training in the form of lower gross wages. So a wage subsidy is a way of sharing these costs with the taxpayer. Thus, the net effect on wage progression depends on whether it reduces costs by more or less than it reduces the benefits.     

Does Government Subsidy Affect Firm Survival? Evidence from Chinese Manufacturing Firms

ABSTRACT

This article applies a matching approach to deal with the selection bias and use the complementary log-log model to analyze the impacts of subsidy on Chinese manufacturing firms’ survival from 1998 to 2007. Our empirical results show that government subsidies significantly decrease the likelihood of firm exit. However, the effect decreases as the level of subsidies increases for private and foreign firms, but displays a nonlinear relationship across subsidy levels for SOEs. We also show the effects vary across the levels of institutional quality measured by the prevalence of rent seeking and government intervention. Further results suggest that the potential channels include increased investment in intangible and fixed assets as well as enhanced profitability.     

Intergenerational Effects of Guaranteed Pension Contracts

In this paper we show that there exist intergenerational cross-subsidization effects in guaranteed interest rate life and pension contracts as the different generations partially share the same reserves. Early generations build up bonus reserves, which are left with the company at expiry of the contract. These bonus reserves function partly as a subsidy of later generations, such that the latter earn a risk-adjusted return above the risk-free rate. Furthermore, we show that this subsidy may be large enough to explain why late generations buy guaranteed interest rate products, which otherwise would not have been part of the optimal portfolio allocation.     

天上掉下个大馅饼——评县域金融机构支农贷款将获定向补贴

2009年3月2日财政部下发了<关于实行新型农村金融机构定向费用补贴的通知>(以下简称<通知>),<通知>规定:经银监会批准设立的村镇银行、贷款公司、农村资金互助社3类新型农村金融机构,凡达到监管要求并实现上年末贷款余额同比增长的,其中村镇银行存贷比还必须大于50%,自2009年至2011年,由中央财政按照上年末贷款余额的2%给予补贴.     

Optimal redistributive tax and education policies in general equilibrium

This paper studies optimal linear and non-linear income taxes and education subsidies in two-type models with endogenous human capital formation, endogenous labor supply, and endogenous wage rates. Assuming constant human capital elasticities, human capital investment should be efficient under optimal linear policies, whether general equilibrium effects are present or not. Hence, education subsidies should not be used for distributional reasons. Due to general equilibrium effects, optimal linear income taxes may even become negative. Optimal non-linear policies exploit general equilibrium effects for redistribution. The high-skilled type optimally has a negative marginal income tax rate and a positive marginal education subsidy. The low-skilled type optimally faces a positive marginal income tax rate and a marginal tax on education. Simulations demonstrate that general equilibrium effects have only a modest effect on optimal non-linear policies.     

政府补助、公司治理与薪酬差距——基于A股上市国有企业的数据检验

依据2011～2013年在我国A股上市的国有企业样本,考量政府补助对薪酬差距的影响.结果表明,拥有绝对权力的国有企业管理层借助政府补助谋取私利,加大了管理层与普通员工的薪酬差距.完善的公司治理机制能够有效的缓解管理层借助政府补助而导致的薪酬差距扩大.     

补“砖头”、补“床头”还是补“人头”——基于浙江省某县养老机构的个案调查

本文通过对浙江省某县1家公办养老机构和1家民办养老机构的个案调查,探讨政府养老机构补贴政策的实施效果,并提出进一步改进补贴政策的建议。调查发现,该公办养老机构收费标准较低,其经营收入不仅低于完全成本,而且低于经营成本,政府通过多种形式对其建设和经营进行了"隐性补贴",这部分补贴事实上由实际入住的老年人所享受,而大部分最终入住该公办养老机构的老年人并非最需要得到补贴的低收入失能老年人。近年来,浙江省对民办养老机构实行按床位补贴建设费用的支持政策。作者对1家在上述政策背景下新成立的民办养老机构的调查发现,床位补贴政策的确一定程度上提高了民间开办养老机构的热情,但也还存在床位空置率高等问题。基于上述调研上,作者提出对低收入失能老人实行养老服务需方补贴,同时逐步减少对公办养老机构的运营和建设补贴,对民办养老机构根据其收养的低收入失能老年人人数实行运营补贴等建议。     

The welfare effects of a subsidy to Multiple Listing Services

We show that the gain in consumer surplus resulting from subsidizing a Multiple Listing Service may exceed the cost of the subsidy. Thus a subsidy financed by taxing the consumer may be Pareto-improving. We give general conditions for this to hold.     

U.S. tax policy and health insurance demand: Can a regressive policy improve welfare?

The U.S. tax policy on health insurance is regressive because it subsidizes only those offered group insurance through their employers, who also tend to have a relatively high income. Moreover, the subsidy takes the form of deductions from the progressive income tax system giving high income earners a larger subsidy. To understand the effect of the policy, we construct a dynamic general equilibrium model with heterogenous agents and an endogenous demand for health insurance. A complete removal of the subsidy may lead to a partial collapse of the group insurance market, reduce the insurance coverage and deteriorate welfare. There is, however, room for improving the coverage and welfare by extending a refundable credit to the individual insurance market.     

进一步完善我国农业补贴政策的思考

财政补贴始终是我国支持和保护农业的重要手段,本文在评价了农业补贴政策的现状和问题的基础上,提出应以增加农民收入和提高农业综合生产力为目标,在WTO框架下进一步完善我国农业补贴政策,充分利用黄箱补贴,拓宽绿箱补贴,完善补贴结构,发挥政策整体效能,更好地解决三农问题。     

An Analysis of the Effect of Tax Policy on Health Insurance Purchases by Risk Group

There is an extensive body of literature dealing with the welfare loss associated with generous levels of health insurance as a function of the tax subsidy. The theoretical discussion in this study considers the effect of the tax subsidy on pooling within plans, and suggests the hypotheses that the tax subsidy will have a disproportionately positive effect on the likelihood that a high‐risk worker will be eligible for and participate in employment‐based coverage, while the effect of the tax subsidy on plan generosity will be greatest for low‐risk employees. If coverage of high‐risk individuals enhances social welfare, this result may offset, at least in part, the welfare loss associated with generous plans. Data from the 1987 National Medical Expenditure Survey are used to test these hypotheses. The results provide evidence that the subsidy works to expand risk pools in the employment‐based health insurance market.     

农业保险对财政投入的放大效应分析

相比直接的灾后财政救济,利用政策性农业保险机制能实现对财政投入效果的放大。本文在对中国和其他实施农业保险国家的对比中总结出对农业保险财政投入的范围、形式,重点剖析了利用农业保险实现财政投入放大效应的作用机制,提出了衡量这一效应的方法和指标,并据此对我国主要农险经营模式的实际放大效果及其原因进行了比较分析,最后,本文针对...     

Medicare retiree drug subsidy compliance considerations

Employers and plan sponsors have struggled with many issues associated with Medicare's retiree drug subsidy program. Recent reviews of employer methods for collecting the subsidy from the Centers for Medicare and Medicaid Services (CMS) identified significant gaps that would affect the subsidy payment and create issues in case of an audit. In fact, the Department of Health and Human Services Office of Inspector General (OIG) has placed audits of employer retiree drug subsidy processes in its work plans for 2006 and 2007. This article discusses areas that employers must address now to avoid significant long-term financial and compliance problems in the future.