Immigration and the pattern of public spending: evidence from OECD countries

Using a panel of OECD countries, we show that immigration systematically alters the composition of public spending in the destination country. To mitigate bias from the endogenous sorting of immigrants, we use an IV estimation strategy. The instrument is constructed by estimating a bilateral migration model for 24 destination and 208 source countries. We find that the host country responds to the increase in immigrants by adjusting various expenditures, such as by reallocating resources from social welfare to national defense and public order. Our findings imply that (1) immigration affects policy outcomes in areas with a low ethnic or redistributive dimension and (2) immigration may have an insubstantial effect on the total size of government.

     

Risk aversion and inequity aversion in demand for unemployment benefits

This paper is an empirical study of what motivates net contributors to support redistributive policies. While studies in the area have tended to consider broad measures of inequality and support for redistribution in general, we focus on a single, salient relationship between local unemployment rates and demand for spending on unemployment benefits. Using a particularity of the Spanish labour market, we estimate how workers’ stated preferences for unemployment benefits spending respond to changes in the local unemployment rate. We then decompose this response into the part explained by risk aversion, and thus demand for insurance, and the part explained by inequity aversion. Our results suggest that increases in local unemployment rates lead to increased demand by workers for unemployment benefits spending. Moreover, our results are consistent with an insurance motive driving this relationship but provide little support for inequity aversion. Our results suggest that studies of the relationship between inequality and demand for redistribution might benefit from considering both the source and measure of the inequality and the instrument of redistribution.     

Public capital, public pension, and growth

This paper constructs an endogenous growth model with overlapping generations, whose engine of economic growth is productive public capital. We investigate a public policy under which the government allocates tax revenue between investment in public capital accumulation and public pension provision. We show that increasing the share of spending on public pensions always reduces economic growth. However, we show numerically that public pension provision improves social welfare and there exists an optimal share of spending on public pension provision unless the value of the time discount factor of the government is sufficiently high. Moreover, we show that in an economy facing an aging population, an increase in social security provision for the old rather than an increase in public investment can be preferable from the viewpoint of social welfare.     

The Effects of Social Spending on Economic Activity: Empirical Evidence from a Panel of OECD Countries*

The aim of this paper is to assess the short‐term effects of social spending on economic activity. Using a panel of OECD countries from 1980 to 2005, the results show that social spending has expansionary effects on GDP. In particular, we find that an increase of 1 per cent in social spending increases GDP by about 0.1 percentage points, which, given the share of social spending in GDP, corresponds to a multiplier of about 0.6. The effect is similar to that of total government spending, and it is larger in periods of severe downturns. Among spending subcategories, social spending on health and on unemployment benefits have the greatest effects. Social spending also positively affects private consumption, while it has negligible effects on investment. The empirical results are economically and statistically significant, and robust.     

Political spending,related voluntary disclosure,and the cost of public debt

Following the Supreme Court decision in the Citizens United v. Federal Election Commission case of 2010, which removed restrictions in relation to firms’ political spending, and building on the growing debate over whether voluntary political spending disclosure (VPSD) provides valuable information, we examine the effect of political spending on the cost of public debt and the role of VPSD on this effect. Based on a measure of VPSD that became available in 2012 and a large dataset on US firms’ actual political spending, manually extracted from different filings, we provide novel evidence that, in the post-Supreme Court decision period, political spending increases the cost of public debt. This is consistent with the uncertainty associated with political spending. Moreover, we find that the level of voluntary disclosure weakens the positive association between political spending and the cost of public debt. These results hold across multiple specifications as well as when we use a sudden release of firms’ political spending as an exogenous shock to political spending.     

Community social capital and individual disaster preparedness in immigrants and Canadian-born individuals: an ecological perspective

Abstract

Psychological research on the predictors of disaster preparedness has mainly focused on individual-level factors, although the social environment plays an important role. Our goal is to provide a systemic perspective to help improve risk communication and risk management for natural disaster risks. We examined how community-level social capital related to individual-level disaster preparedness in immigrants compared with Canadian-born individuals. We characterised participants’ communities’ social capital by conceptually linking two national surveys using postal codes. We performed sequential linear multiple regression analysis to examine the relationship between community social capital and individual disaster preparedness. Results revealed three components of social capital: societal trust, interaction with friends, and neighbourhood contact. Societal trust positively predicted the extent to which immigrants and Canadian-born individuals knew someone who would search for them post-disaster. Interestingly, results revealed that Canadian-born individuals were more likely to uptake emergency planning when living in a community with strong societal trust, while the reverse was true for immigrants. Results suggest that some components of social capital may have an effect on certain preparedness behaviours. Societal trust could have both positive and negative effects on emergency planning depending on individuals’ immigrant status. Risk communication and risk management should consider social capital as part of the framework for effective disaster preparedness.     

Optimal taxation and public provision for poverty reduction

The existing literature on optimal taxation typically assumes there exists a capacity to implement complex tax schemes, which is not necessarily the case for many developing countries. We examine the determinants of optimal redistributive policies in the context of a developing country that can only implement linear tax policies due to administrative reasons. Further, the reduction of poverty is typically the expressed goal of such countries, and this feature is also taken into account in our model. We derive the optimality conditions for linear income taxation, commodity taxation, and public provision of private and public goods for the poverty minimization case and compare the results to those derived under a general welfarist objective function. We also study the implications of informality on optimal redistributive policies for such countries. The exercise reveals non-trivial differences in optimal tax rules under the different assumptions.     

Fueling fiscal interactions: commodity price shocks and local government spending in Colombia

This paper explores fiscal interactions in a developing country. We analyze whether public expenditures in neighboring municipalities influence local spending decisions within a comprehensive set of expenditure categories. Our analysis is based on panel data covering the universe of Colombian municipalities from 2000 to 2010. We offer a quasi-experimental identification strategy exploiting exogenous variation in municipalities’ exposure to changes in the world market price of oil, depending on the municipalities’ endowment with oil resources and controlling for municipality fixed effects. While we find evidence of strong spatial autocorrelation of total local public spending as well as in almost all expenditure categories, the quasi-experimental approach reveals that there are no significant causal fiscal interaction effects between municipalities. This highlights the importance of using additional sources of exogenous variation for the identification of fiscal interactions. In the developing country context, our findings suggest that fiscal decentralization policies do not lead to a race to the bottom in local public expenditures.     

事业单位改革和财政政策选择

虽然政府在发展社会事业上负有不可推卸的责任,但公共服务的多层次性和群众需求的多样化特征使得政府无力也不可能成为唯一的公共服务供给者.因此,在事业单位改革的基本思路上,一是要坚持多元化的改革取向,让能走向市场的事业单位进入市场,政府集中财力保障基础性社会事业的发展.二是要动员社会力量举办社会事业,以满足不同层次的公共服务需求.三是要正确看待当前社会事业领域中非营利性组织的地位作用,并健全相应的管理制度.为了取得理想的改革效果,财政必须要从改进拨款方式、加强绩效考评入手,加强对社会事业支出的管理.同时还应完善相关优惠政策,调动民间资本进入社会事业领域的积极性.     

The Impact of Strategic Investment Choices on Post-Issue Operating Performance and Survival of US IPO Firms

Abstract:  We examine the impact of strategic investment choices at the time of the IPO on: (i) the post-issue operating performance and (ii) the likelihood of failure and time-to-failure of newly public US firms. Our post-issue operating performance analysis uses various performance metrics, benchmarks, and expectation models. Overall, our evidence indicates that the extent of diversification and industry-adjusted capital expenditures intensity are generally positively related to changes in operating performance. We do not, however, document a consistent relation between industry-adjusted R&D expenditures and changes in operating performance. The results from our survival analysis suggest that pre-issue managerial commitment to R&D spending and developing diversified product lines enhance the ability of IPO issuing firms to remain viable for longer periods of time. Our study highlights the impact of various managerial investment decisions on the subsequent performance of newly public firms.     

Public education spending in a globalized world:

This paper studies the effect of globalization on public expenditures allocated to different stages of education. First, we derive theoretically that globalization’s influence on education expenditures depends on the type of government. For benevolent governments, the model suggests that expenditures for higher education will increase and expenditures for basic education will decline with deepening economic integration. For Leviathan governments, on the other hand, the effects of globalization on public education spending cannot be unambiguously predicted. In the second part of the paper, we empirically analyze globalization’s influence on primary, secondary, and tertiary education expenditures with panel data covering 104 countries over the 1992–2006 period. The results indicate that globalization has led in both industrialized and developing countries to more spending for secondary and tertiary and to less spending for primary education.     

农村水利工程移民社会保障方案研究——以江苏省“里下河洼地治理工程”为例

水利工程移民社会保障在实践中存在误区和实施困境,正确、合理解决水利工程移民社会保障问题,是建立水利工程移民合理、规范、多元保障机制的重要内容之一。论文运用公共政策理论和社会保障基本理论,以经济发达的江苏省水利工程为例,结合现行水利工程移民安置政策要求,通过分析土地对移民失地前的保障作用,发现现行"社会保障安置方式"存在误区;社会保障是移民多元保障机制的基础;移民纳入城乡社会保障体系的内容应包括城乡居民最低生活保障、养老保险、医疗保险、失业保险。构建移民社会保障资金需求计算方法,以里下河洼地治理工程为例,运行定量方法,测算了移民社会保障资金需求,分析了征地补偿资金和社保资金平衡问题,提出资金缺口的筹措方案。     

Political institutions and government spending behavior: theory and evidence from Iran

This study examines how the quality of political institutions affects the distribution of the government budget in Iran. We first introduce a mechanism through which democracy can shift government expenditure from national defense (military) to productivity-enhancing public spending (e.g., education). Using impulse response functions and a variance decomposition analysis on the basis of a vector autoregressive (VAR) model, our results imply that the response of military spending to an improvement (a deterioration) of democratic institutions is negative (positive) and statistically significant, whereas that of education spending is positive (negative) and significant. Our results are robust to other indicators of political institutions, different orderings of variables in the VAR, and alternative specifications of government spending categories.     

Will Private Health Insurance Make the Distribution of Public Health Subsidies More Equal? The Case of India

This paper assesses the impact of the entry of private players in the health insurance market on the size of the insurance market and the distribution of public health subsidies on health care provision in India. Simulation results presented in the paper suggest that the redistributive effect is small when richer groups have privileged access to public facilities.     

公共支出不断增长的一个解释：鲍莫尔非均衡增长模型

公共支出不断增长、政府规模不断扩大是一种全球性的社会经济现象。对于公共支出不断增长的原因的解释不胜枚举,其中也不乏成熟的理论。本文主要从1967年鲍莫尔建立的两部门非均衡增长模型出发,给出公共支出规模不断增长的一个可能性解释。并基于此理论结合我国实际试图给出一些合理的政策建议。     

UK immigrants and the foundation of the US public accountancy profession

Building on a previous study (Lee, 1997) describing the case of Edinburgh chartered accountants, the current study observes 394 chartered and incorporated accountants who migrated to the US by the end of 1914. The data are reported in the context of an emerging US public accountancy profession, and the purpose of the paper is to document the migration and its place in the development of American public accountancy. A comparison is made with 112 unqualified emigrants from the UK to the US who became public accountants there by the end of 1914. This contrast provides a means of discovering subsets of the migrant group with respect to preemigration backgrounds and post-immigration careers of 506 men. Comparisons are also made of differences within defined subsets of the qualified migrant group. Data were collected from available UK and US sources. These were then aggregated in a manner that permits a coherent picture to emerge of the immigrants as public accountants in the US at the end of the nineteenth and beginning of the twentieth centuries. The analyses reveal that the immigrant group was relatively small, and that the immigrants succeeded in their careers to differing degrees. A sizeable proportion returned to the UK or moved on to another host country. Of those that remained in the US, most had productive if unexceptional lives, typically in public accountancy. A few men became leaders of US public accountancy institutions and firms. A small minority achieved senior positions in industry and commerce. It is argued that the influence of UK accountants on US accounting and auditing went beyond the documented successes of specific individuals and firms. The paper is therefore more than the typical history of prominent US accountants and firms of the past.     

Free Immigration and Welfare Access: The Swedish Experience

With the expansion of the European Union from 15 to 25 member countries in 2004, fears of migrants’ excessive welfare use led 14 of the 15 older member countries to impose restrictions on the access of citizens of the new member countries – the A10 countries – to their welfare systems. Sweden was the only exception. This paper evaluates the net contribution of post‐enlargement A10 immigrants to Swedish public finances in 2007. On average, A10 immigrants generate less public revenue than the population on average, but they also cost less. The net result is a zero or small positive net contribution. In particular, A10 immigrants do not benefit more from basic social welfare than the population on average. The discounted net contribution over the A10 immigrants’ lifetimes may be positive or negative depending, for example, on their income assimilation rates and on future real interest rates.     

The Employment and Earnings Gaps between Natives and Immigrants in the UK between 1981 and 2006

We exploit the sizeable and long Lifetime Labour Market Database (LLMDB) to estimate the immigrant–native employment gap across gender, across continents of nationality and across lengths of stay in the UK between 1981 and 2006. These estimates are a novel contribution, as estimates for men and women are scarce in the literature and estimates across immigrants’ origins and lengths of stay are as yet unavailable. Furthermore, we estimate the employment gap as the differential in the number of employed weeks in the year between immigrants and natives, which has not been done before – this contrasts with the employment probability gap usually estimated in the literature. We also estimate the immigrant–native earnings gap across gender, across the entire earnings distribution, across continents of nationality and across lengths of stay. Estimates across the earnings distribution are also a novel contribution, as these are also as yet unavailable in the literature. Our main conclusion is that both the immigrant–native employment and earnings gaps vary across gender, continents of nationality and lengths of stay. Immigrant women earn more than native women throughout the distribution. The earnings gap is positive throughout for females: smaller at the bottom, larger at the top and relatively constant in the middle of the distribution. In contrast, it increases monotonically across the distribution for males: it is negative at the bottom and positive at the top. In the main, immigrants from Africa, Asia and the Middle East, Central and South America, and Eastern Europe suffer larger employment and earnings penalties, which are reduced as their length of stay increases. In contrast, immigrants from North America have a more favourable labour market experience.     

Assessing the Fiscal Costs and Benefits of A8 Migration to the UK*

This paper assesses the fiscal consequences of migration to the UK from the Central and Eastern European countries that joined the European Union in May 2004 (A8 countries). We show that A8 immigrants who arrived after EU enlargement in 2004 and who have at least one year of residence, and are therefore legally eligible to claim benefits, are 59 per cent less likely than natives to receive state benefits or tax credits and 57 per cent less likely to live in social housing. Furthermore, even if A8 immigrants had the same demographic characteristics as natives, they would still be 13 per cent less likely to receive benefits and 29 per cent less likely to live in social housing. We go on to compare the net fiscal contribution of A8 immigrants with that of individuals born in the UK, and find that in each fiscal year since enlargement in 2004, irrespective of the way that the net fiscal contribution is defined, A8 immigrants made a positive contribution to the public finances despite the fact that the UK has been running a budget deficit over the last few years. This is because they have a higher labour force participation rate, pay proportionately more in indirect taxes and make much less use of benefits and public services.