How a race to the bottom can make you fat

This article measures the effect of fiscal competition on obesity rates in the United States through education and health spending. We hypothesize that fiscal competition to attract firms results in lower business tax revenues and higher public infrastructure spending which crowds out education and health spending leading to an increase in obesity rates. We empirically test this hypothesis. We find that there is significant fiscal competition to attract firms. Next, we show that when business tax revenues are lowered and public infrastructure spending favouring businesses increased, public health and education spending declines and obesity rates significantly increase. Thus, fiscal competition significantly contributes to obesity rates through the education and health spending channel.     

Does transition make you happy?1

This paper analyses life satisfaction in transition countries using evidence from the World Values Survey. The paper demonstrates that individuals in transition economies on average record lower values of self‐reported satisfaction with life compared with those in non‐transition countries. A comparison across time for a smaller sample of countries shows that life satisfaction levels have returned close to pre‐transition levels in most cases, after a dip in the mid‐1990s. The socio‐economic groups that exhibit relatively higher levels of happiness include students, people with higher levels of education and those on higher incomes. Happiness declines with age until the early‐50s and is slow to recover afterwards. Self‐employed people in transition countries show a level of satisfaction as high as, or higher than, full‐time employees, in contrast to evidence from non‐transition countries. In addition, satisfaction levels are highest in those countries where standards of economic governance are most advanced and where inequality is lower.