On the consumption insurance effects of long-term care insurance in Japan: Evidence from micro-level household data

Using micro-level household data in the 2001 Comprehensive Survey of the Living Conditions of the People on Health and Welfare compiled by the Japanese Ministry of Health, Labor and Welfare, this paper examines how having a household member in need of long-term nursing care can result in welfare losses measured in terms of consumption. In so doing, this study evaluates the role of the public long-term care insurance scheme implemented in Japan in April 2000. The results indicate that when households include a disabled family member, household consumption net of long-term care costs do not decrease as much as before the introduction of long-term care insurance. Further, when compared with the surveys conducted in 1998, the adverse effects on consumption net of long-term care costs have become much weaker. These findings suggest that the introduction of social insurance in 2000 helped Japanese households to reduce the welfare losses associated with a disabled family member.     

CEO compensation and firm performance in Japan: Evidence from new panel data on individual CEO pay

Prior studies on Japanese executive compensation have been constrained by the lack of longitudinal data on individual CEO pay. Using unique 10-year panel data on individual CEO's salary and bonus of Japanese firms from 1986 to 1995, we present the first estimates on pay-performance relations for Japanese CEO compensation. Specifically we find consistently that Japanese CEO's cash compensation is sensitive to firm performance (especially accounting measures), and that the “semi-elasticity” of CEO's cash compensation with respect to ROA is 1.3 to 1.4, which is in general agreement with prior estimates elsewhere. As such, our estimates do not support that Japanese corporate governance is unusually defunct with regard to the significance and size of the sensitivity of CEO compensation to accounting profitability. On the other hand, to be consistent with the literature on Japanese corporate governance that tends to downplay the role of shareholders and stress the role of banks and employees, we find that stock market performance tends to play a less important role in the determination of Japanese CEO compensation. Finally, we find that the bonus system makes CEO compensation more responsive to firm performance in Japan. The finding is in contrast to the literature on compensation for regular employees in Japan which often argues that bonus is a disguised base wage. J. Japanese Int. Economies 20 (1) (2006) 1–19.     

A distributional analysis of union-wage effects in South Africa: Evidence from panel data

This paper examines whether individual workers’ time-invariant unobservable characteristics influence estimates of the South African union wage premium across the length of the conditional wage distribution. It employs the 2001–7 South African Labour Force survey and a fixed effects quantile regression estimator. Results show a relatively large (small) wage premium at the bottom (top) of the conditional wage distribution when workers’ time-invariant unobserved characteristics are ignored. Accounting for this set of factors substantially reduces the wage premium at all points of the distribution. In fact, the wage premium becomes somewhat constant across the conditional wage distribution, suggesting that unions in South Africa have little wage compressionary effects.     

The effects of Japanese social security retirement benefits on personal saving and elderly labor force behavior

Japanese annual time-series data covering the period 1951 to 1982 reveals that changes in the program of social security retirement benefits have substantial influence on personal saving and retirement behavior. The empirical results show that social security retirement benefits depress personal saving by approximately 13,500 yen per capita in real terms from 1951 to 1982. However, declining labor force participation of the elderly (i.e., earlier retirement) stimulates personal saving by an estimate 500 yen over the same period. The study finds that the benefit effect dominates the retirement effect. The net effect is consequently a downward impact on personal saving. The parameter estimates indicate that the retirement behavior induced by social security retirement benefits tends to become more sensitive and responsive to a rise in the benefits. In addition, this study has identified a negative interdependency between the personal saving and labor retirement behaviors; that is, an individual saves more before retirement if he expects to stay a shorter time in the labor market, and vice versa. Moreover, personal saving influenced by retirement behavior tends to become less and less responsive, though the results indicate a relatively large response, and although very small, the retirement behavior gradually becomes more responsive to changes in personal saving.     

The macroeconomic effects of monetary policy: Evidence from Japan

This study examines the macroeconomic effects of monetary policy in Japan. We apply the new identification strategy proposed by Bu et al. (2021) to the Japanese case and estimate monetary policy shocks that bridge periods of conventional and unconventional monetary policymaking. We show the macroeconomic effects of monetary policy; a contractionary monetary policy shock significantly decreases output and inflation rates even under the effective lower bound. However, because the shorter-term and longer-term nominal interest rates are already close to zero, the magnitude of monetary policy shocks on the macroeconomic variables is modest.     

Inequality of opportunity in China: Evidence from pseudo panel data

We construct a pseudo panel sample from the China General Social Survey to study the inequality of opportunity in China. The pseudo panel enables us to control for cohort-specific heterogeneities when estimating the Mincer equation, and the results show that individual circumstances play a prominent role in determining income advantage. Counterfactual analysis further reveals the importance of cohort-level circumstances: individual circumstances account for less than 10% of the observed income inequality, whereas equalizing both the individual circumstances and the cohort fixed effects reduces income inequality by 30%. Among the individual circumstances we examine, gender and paternal characteristics contribute more to income inequality than does hukou of birth. Subsample analysis shows that China's western provinces exhibit the highest inequality of opportunity and that the inequality of opportunity among younger cohorts is smaller than that among older cohorts.     

The effect of foreign competition on UK employment and wages: Evidence from firm-level panel data

The Effect of Foreign Competition on UK Employment and Wages: Evidence from Firm-Level Panel Data. —This paper contributes to the sparse empirical literature on the effects of foreign competition on domestic employment and wages. The authors estimate a structural labour demand equation on UK firm-level panel data between 1982 and 1989 and several wage equations. When they restrict the sample to the manufacturing sector only, they find for the unionized firms that foreign competition has a negative effect on both wages and on employment. However, when UK manufacturing firms face only a few rivals, foreign competition has a positive effect on wages, but no effect on employment.     

Unobserved firm heterogeneity and the size-exports nexus: Evidence from German panel data

This paper starts from the stylized fact that firm size and exporting tends to be positively related. Using large sets of establishment panel data for three different industries from official statistics, evidence is presented that the familiar picture of an export/sales ratio that increases (at a decreasing rate) with firm size vanishes if unobserved firm heterogeneity is controlled for in a fixed-effects fractional logit regression model. This finding is well in line with the fact that many small firms are “hidden export champions.” JEL no. F10, D21, L60     

Who bears the burden of social insurance? Evidence from Japanese health and long-term care insurance data

Using the society-managed health insurance data, which is cross-sectional time-series and covers 1670 health insurance societies for seven years (FY1995–2001), we found for the first time in Japan that the majority of the employers' contribution to health insurance is shifting back onto the employees in the form of wage reduction. On the other hand, we cannot find such evidence for the contribution to long-term care insurance using a two-year (FY2000–2001) panel data set. The difference can be theoretically explained by how employees value the contribution relative to social security benefits they enjoy. J. Japanese Int. Economies 18 (4) (2004) 565–581.     

The price and income elasticities of the top clothing exporters: Evidence from a panel data analysis

This paper studies the main export function features of twelve top clothing exporters (China, Hong Kong, France, Germany, India, Indonesia, Italy, Netherlands, Spain, Turkey, UK and USA) in the period between 1992 and 2011. Price and income elasticities are estimated for each economy using a panel data approach, after controlling for nonstationarity, cointegration and Granger causality. Rolling regressions are also performed, and show the existence of some elasticities instability over time, fundamentally related to the profound economic and institutional changes affecting the clothing trade in the period under consideration. The analysis suggests that most advanced economies, including Hong Kong, changed their position in the global value chain towards an “organizational” role. China confirms its leadership in clothing exports although its rising price elasticity sounds a warning with regard to future prospects.     

The effects of credit lines on cash holdings and capital investment: Evidence from Japan

This study examines how credit lines affect corporate cash holdings and capital investment using a hand-collected data on publicly traded Japanese firms from 2006 to 2017. The study compares firms with and without credit lines to investigate the effects of credit lines. The empirical results are as follows: (1) Firms with credit lines hold smaller cash reserves than those without; (2) Firms with credit lines undertake more capital investment than those without; (3) The effects of credit lines are more amplified for financially constrained firms than their counterpart; (4) A close bank–firm relationship plays a positive role in the effect of credit lines on corporate activities.These empirical findings indicate that credit lines can improve firms’ financial flexibility and allow them to use cash holdings held for precautionary reasons to invest. The results also show that credit lines and the attendant implicit bank–firm relationships are complementary to each other. Moreover, having both credit lines and a close bank–firm relationship is important to Japanese firms for their corporate activities. Furthermore, the results imply that the use of credit lines is still relatively undeveloped in Japan, which may be a reason for the country's large corporate savings and lackluster investment.     

Labor market concentration and heterogeneous effects on wages: Evidence from Japan

This study provides empirical evidence of the impact of labor market concentration on wages. We find that (1) wages are suppressed in more concentrated labor markets, (2) labor rigidity is associated with wage responsiveness to labor market concentration, (3) the impact of labor market concentration on wages is smaller for firms with more competitive downstream product markets, and (4) greater job opportunities outside the manufacturing sector weaken the relationship between concentration and wages. In sum, our findings indicate that labor rigidity and the degree of competition in downstream product markets, as well as outside options, affect the relationship between market concentration and wages.     

地方政府财政支出政策效果差异化分析——基于四川省面板数据

基于四川省1995—2006年面板数据,利用工具变量评估财政支出乘数模型并借鉴分位数模型思想,发现财政支出政策不利于缩小区域内经济发展差距,即对于经济发展水平越高的地方,财政支出效果越好,原因在于其资本利用能力,即财政支出对投资的溢出效应,造成第二产业增长幅度不同,最终呈现出财政支出效果不同.认识这一点对于在经济处于新常态背景下,有利于优化开发财政产业政策的作用空间.     

On the direct and indirect effects of the Great East Japan earthquake on self rated health through social connections: Mediation analysis

The Great East Japan Earthquake created health hazards for many people. Using Panel Data gathered in Iwanuma city, Japan, at two points in time (in 2010 before the quake, and in 2013 after the quake), we found that the high degree of housing damage negatively affected victims’ self rated health (SRH) (direct effect), and decreased the levels of their social connections, which in turn also had a harmful effect on their SRH (indirect effect). We also found that although the direct impacts of earthquakes disappear relatively quickly, the harmful indirect effects associated with a decrease in social connections are slower to dissipate. We conducted a first-difference two-step GMM estimation to consider the possible problem of endogeneity. The results support the above conclusion, and show that in the short-term, the indirect impacts of the earthquake accounted for 55 % of all the impacts experienced.     

Inequality of opportunity and household education expenditures: Evidence from panel data in China

This paper offers one of the first pieces of empirical evidence on the impact of inequality of opportunity on household education investment by using the panel data from China Family Panel Studies (CFPS) in three waves (2010, 2012 and 2014). Our result suggests that inequality of opportunity has a negative effect on household education expenditures. This result is robust to a series of robustness checks. Furthermore, for relatively disadvantaged households (household heads with less education, income, or rural hukou status), inequality of opportunity has a larger negative effect on their education expenditures. Policy suggestions to lower inequality of opportunity may include reducing labor market discrimination based on gender and hukou status, balancing education resources to create more equal educational opportunities, and offering children education subsidies in low-income families.     

Impact of land tenure policy on agricultural investments in China: Evidence from a panel data study

The goal of this paper is to examine the impact of changes in China's rural land policy on agricultural investments. Dramatic changes occurred in China's rural land policies after 2000, including the extension of rural land contractual period, restriction of land reallocation among villages and villagers groups, elimination of agricultural taxes for responsibility land, and rapid development of rural land rental markets. These changes have given farmers more secure tenure on collectively controlled responsibility land and have strengthened farmers' income rights for responsibility lands, incentivizing them to increase their investments on responsibility lands. A panel data method was used to quantitatively investigate the impact of land policy changes on agricultural investment. We considered the application of organic fertilizer as an indicator for long-term agricultural investment, and compared the use of organic fertilizer between private plots and responsibility lands operated by the same household. The results showed that the difference in organic fertilizer use between private plots and responsibility land for the same household has become smaller from 2000 to 2008. Our findings suggest that recent changes in rural land policies have provided farmers incentives to increase land quality investment on their responsibility lands.     

The effects of input tariffs on productivity: panel data evidence for OECD countries

Based on a panel of 16 OECD countries and 10 manufacturing industries over 1996–2007, this paper investigates the impact of tariffs on foreign intermediate goods on productivity growth in downstream manufacturing industries. The results show that imposing tariffs on imported intermediate goods is particularly harmful for industries that operate close to the global technological frontier. We also consider the possibility that input-tariff liberalisation may have different effects depending on the technological content of imported intermediate goods. Our findings suggest that protecting imports of high-technological goods is more harmful for productivity improvements in industries that operate close to global best practice.     

Inequality of opportunity and household risky asset investment: Evidence from panel data in China

Based on the household panel data over three waves in China, this paper investigates how inequality of opportunity of a region affects household risky asset investment. The empirical results show that inequality of opportunity raises both the probability and the share of household risky asset investment in the region. Our key results are robust to a series of sensitivity checks. The heterogeneity analyses tell us that richer and more educated households seem to be affected more by inequality of opportunity of the county they reside in. The paper also tests several possible channels behind the observed relationship, showing that the following channels help bring upon this effect: increasing material aspiration, changing risk preferences, and reducing household expenditures.     

Inventing social capital: Evidence from African American inventors, 1843–1930

Much recent work has focused on the influence of social capital on innovative outcomes. Little research has been done on disadvantaged groups who were often restricted from participation in social networks that provide information necessary for invention and innovation. Unique new data on African American inventors and patentees between 1843 and 1930 permit an empirical investigation of the relation between social capital and economic outcomes. I find that African Americans used both traditional, i.e., occupation-based, and nontraditional, i.e., civic, networks to maximize inventive output and that laws constraining social-capital formation are most negatively correlated with economically important inventive activity.     

Local government consumption and firm performance: Evidence from the "TPCs" in China

Government consumption is an important factor affecting corporate performance. By exploiting a unique data set that reveals the Three Public Consumptions (TPCs) of China’s prefecture-level city governments, this paper investigates the impact of actual local government consumption on corporate performance and identifies the potential impact mechanism. We show that increases in local government consumption did lead to declines in firm productivity. TPC expenditures on official cars and official receptions had the most obvious impact on corporate performance. After considering endogenous measurement errors and substitution variables, the conclusion remained stable. Moreover, we show that the increase of local government TPC expenditures caused an increase in corporate tax burden, a decline in government efficiency, and excessive administrative intervention, which in turn caused a decline in firm performance. Our findings are particularly pronounced in non-state-owned enterprises, in firms with tight financing constraints, and in regions with weak marketization and low budget transparency. This study expands the theory that government behavior affects corporate performance, and also provides policy implications regarding restraints on government consumption.