MUCH ADO ABOUT NOTHING? DEMOGRAPHIC BULGES,THE PRODUCTIVITY PUZZLE,AND CPP REFORM

Analysts predict that future demographically driven financial imbalances will undermine the sustainability of pay-as-you-go social insurance arrangements like the Canada Pension Plan (CPP). Proposed reforms for the CPP focus on raising the contribution rate to pre fund future benefits. In an overlapping generations model, the authors examine how demographic factors alone could explain the observed changes in productivity/wage growth over the last 30 years. The authors also examine how these factors impact on a pay-as-you-go financed CPP. If Canada is a small open economy, then real wages and real interest rates are not affected by domestic demographic conditions. In this setting, increasing payroll taxes transfers the burden of finance away from the lower income baby bust generation to the higher income baby boom generation. In contrast, if Canada can be characterized as a closed economy, then real wages and real interest rates are sensitive to domestic demographic conditions. In this setting, increasing payroll taxes now to keep taxes lower in future is intergenerationally regressive because the CPP burden is reduced for the well off baby bust generation and passed onto the lower income baby boomers. ( JEL H55, J18, J10)     

More or Less Equal? Australian Income Distribution in 1933 and 1980*

Utilizing information in the 1933 census we estimate several measures of individual and household income inequality for that year. Allowance is made for the effect of the Depression on the 1933 income distribution, revealing a clearly adverse impact. Comparisons with recent years indicate marked declines in aggregate income inequality.     

OCCUPATIONAL ATTAINMENT OF MEN IN BRITAIN

The occupational attainment of men aged 33 is examined usinglongitudinal cohort data. We find that family background andearly child development has a much stronger effect on occupationalattainment than found in previous studies for Britain. Testsin maths and reading taken at age 7, 11, and 16 provide importantinformation regarding the likelihood of occupational success.Our results appear to be insensitive to whether we measure attainmentusing mean earnings or occupational status. Failure to controlfor unobserved person-specific fixed effects causes significantdownward bias in estimated returns to educational qualificationsacquired after age 23.     

CERCLA AND DEEP POCKETS: MARKET RESPONSE TO THE SUPERFUND PROGRAM

This paper uses event study methods to estimate wealth effects upon shareholders who are named by the U.S. Environmental Protection Agency (EPA) as potentially responsible parties at a Superfund site. Impacts appear to be divided into three periods: an initial program period where stock market effects depend largely on prior visibility of the site, a second period where likely financial impact is more important, and a third period where notification has little association with either visibility or financial measures. However, the expected remediation cost burden is not borne evenly. "Deep-pocket" firms appear to be disproportionately penalized by the market during the second period.