The determinants and labour market effects of lifelong learning

Despite the policy importance of lifelong learning, there is very little hard evidence from the UK on (a) who undertakes lifelong learning and why, and (b) the economic benefits of lifelong learning. This paper uses a rich longitudinal panel data set to look at key factors that determine whether someone undertakes lifelong learning and then models the effect of the different qualifications acquired via lifelong learning on individuals’ economic outcomes, namely wages and the likelihood of being employed. Those who left school with O-level qualifications or above were much more likely to undertake lifelong learning. Undertaking one episode of lifelong learning also increased the probability of undertaking more lifelong learning. We found little evidence of positive wage effects from lifelong learning. However, males who left school with only low-level qualifications do earn substantially more if they undertake a degree via lifelong learning. We also found important positive employment effects from lifelong learning.     

Volatility transmission between stock and foreign exchange markets: a connectedness analysis

ABSTRACT

This paper empirically investigates volatility transmission among stock and foreign exchange markets in seven major world economies during the period July 1988 to May 2018. To this end, we first perform a static and dynamic analysis to measure the total volatility connectedness in the entire period (the system-wide approach). Second, we make use of a dynamic analysis to evaluate the net directional connectedness for each market. To gain further insights, we examine the time-varying behaviour of net pair-wise directional connectedness during the financial turmoil periods experienced in the sample period Our results suggest that slightly more than half of the total variance of the forecast errors is explained by shocks across markets rather than by idiosyncratic shocks. Furthermore, we find that volatility connectedness varies over time, with a surge during periods of increasing economic and financial instability.     

Property rights on First Nations reserve land

This paper examines the economic effects of existing private property rights on First Nations reserves. We focus on three regimes of land tenure: lawful possession, designated land and permits. These land regimes have been used to create individual landholdings and grant secure and transferable rights of use of reserve land. Using confidential census microdata and rich administrative data, we find evidence of a positive relationship between the use of these tenure regimes and homeownership rates, housing conditions and band's public spending. We also observe a positive relationship with average income. However, this last result is driven by the inflow of a non-Indigenous population not by improvements in Indigenous households’ income or on-reserve employment. Our findings thus suggest that while reforms to individual property rights on reserve have some positive effects, their scope remains limited and they are unlikely to constitute a transformative tool to alleviate poverty on reserve.     

Can traffic light nutritional labels induce healthier consumer choices? Experimental evidence from a developing country

In a context of increasing health problems related to bad dietary habits in developing countries, simplified nutritional label formats may be a promising policy alternative. The aim of this study is to assess whether the multiple traffic light (MTL) system can improve the nutritional quality of consumer decisions. We conducted a selection experiment in Peru, where participants were offered a choice between three alternatives in two different food categories (crackers and beverages). Individuals were randomly assigned products with MTL labels on them. Our results reveal that exposure to MTL labels significantly increases the probability of avoiding the least healthy options and of choosing the healthiest items among the alternatives provided. These effects are large in magnitude and seem to be driven by individuals that are female, report average or above average dietary habits, and lack basic nutritional knowledge. However, our findings also suggest that the effectiveness of MTL labels may be sensitive to the specific characteristics of the set of options provided. These findings contribute to the emerging experimental literature on MTL labels in two ways. First, we provide evidence that this system can be effective in inducing consumers to make healthier choices in real‐life situations. Second, we explore which individuals are more likely to benefit from exposure to MTL labels, as well as potential limitations to their effectiveness. Overall, our results provide new insights on how to assess the issue of bad nutrition in emerging economies.     

Assessing the Welfare Impact of Tax Reform: A Case Study of the 2001 U.S. Tax Cut

This note acknowledges a programming error in our paper, “Assessing the Welfare Impact of Tax Reform: A Case Study of the 2001 U.S. Tax Cut” (Review of Income and Wealth, 58(2), 233–56, 2012). Correcting the error primarily has the effect of scaling the calculated family welfare impact of 2001 U.S. Tax Cut. The primary conclusions from the analysis, however, are unaffected.     

Enhancing individual entrepreneurial orientation measurement using a metacognitive decision making-based framework

Entrepreneurship, and individuals’ predisposition toward entrepreneurial activities in particular, i.e. Individual Entrepreneurial Orientation (IEO), has been gaining increasing relevance in academia and management practice alike. Understanding IEO is a critical element not only for its promotion, but for better and more informed managerial and investor decision making as well. As such, this study proposes a new framework for understanding and measuring IEO based on the integrated use of cognitive mapping and the interactive multiple criteria decision making (TODIM) method. We present the steps for building such a framework, as well as a practical application of these steps. The results are promising: the methodology applied allowed a large number of determinants of IEO and their relationships to be mapped; and, subsequently, ranked and weighted for the creation of an IEO measurement tool. The implications of the resulting framework for theory and practice, its limitations and possibilities for further research are also discussed.     

Classical and Impulse Stochastic Control of the Exchange Rate Using Interest Rates and Reserves

We consider the problem of a Central Bank that wants the exchange rate to be as close as possible to a given target, and in order to do that uses both the interest rate level and interventions in the foreign exchange market. We model this as a mixed classical‐impulse stochastic control problem, and provide for the first time a solution to that kind of problem. We give examples of solutions that allow us to perform an interesting economic analysis of the optimal strategy of the Central Bank.     

Learning from accidents: Updates of the European regulation on the investigation and prevention of accidents and incidents in civil aviation

Civil aviation has a longstanding tradition of investigating accidents and reporting incidents, which contributes to making aviation one of the safest forms of transport.To make flying safer, independent investigation into accidents is essential as it the surest way of identifying the causes of an accident and answering the fundamental questions “What really happened?” and “What can be done to prevent similar incidents in the future?”.The obligation to investigate accidents is enshrined in the Chicago Convention of 1944. Recognizing the importance of accident investigation, the European Union adopted Council Directive 94/56/EC establishing the fundamental principles governing the investigation of civil aviation accidents and incidents and later on Directive 2003/42/EC on occurrence reporting. They both significantly contributed to harmonization of accident prevention.But with air traffic steadily increasing, accidents do happen despite the best efforts of regulators and industry. The organization of the air transport sector is much more complex now than it was a decade ago. Today there is significant divergence in the investigating capacity of the EU Member States compared to 1994. Furthermore nowadays investigating air accidents take new kinds of expertise and more resources than a decade ago. At the same time there is a new legal and institutional environment in Europe derived from the adoption of European aviation safety rules. Also the organizational set-up has changed substantially with the establishment of the European Aviation Safety Agency (EASA), which is now responsible for certifying aircraft in the EU. The EU rules on investigating air accidents need to be updated to reflect the current realities of Europe's aviation market and the complexity of the global aviation industry.Accordingly, over the last few years the European Commission has been working on a Regulation on the investigation and prevention of accidents and incidents in civil aviation, with the intention of updating and replacing the existing Directive. With this new regulation the Commission aims to promote more efficient and independent inquiries into the causes of air accidents and also expects to strengthen the rights of the victims of air accidents.Today the end is in sight, once that the Commission and European Parliament have reached an agreement about the content and text of this new regulation. Reasons behind this new regulation are presented in this paper together with a detailed explanation of its main contents, an assessment of their impact and their expected benefits.     

What economic democracy for degrowth? Some comments on the contribution of socialist models and Cuban agroecology

While degrowth is about reducing energy and material flows in the economy while sustaining basic human needs, capitalism fosters the opposite trend. How then is degrowth to be implemented on a large scale? In line with different critical intellectual traditions, we argue that degrowth is unlikely to occur within an economy based on capital accumulation and free market of assets. Our objective is then to preliminarily investigate the links between economic structures, democratic principles, and degrowth. We do this, firstly, by briefly exploring some of the main theoretical models of economic democracy in order to find out their potential for achieving sustainable degrowth. In our view, models of self-managed socialism have the best potential for this. Secondly, we intend to learn some empirical lessons from a countrywide experience: Cuban agroecology, today's largest real-life experience of agroecological “degrowth”. Our hypothesis is that the Cuban economy, which limits the private accumulation of capital and of productive assets, is in a better position for achieving forms of sustainable degrowth than capitalist economies, but that it would be even more so with more democracy. The Cuban agricultural system faces the challenge to free itself from the central planning tradition. This could be achieved by following the current process of giving increasing autonomy to small producers. Specifically, we argue that small-scale farmer cooperatives have the best potential for achieving the degrowth-oriented goals of agroecology.     

Firms' price and wage adjustment in Europe: Survey evidence on nominal stickiness

This paper presents new evidence on the patterns of price and wage adjustment in European firms and on the extent of nominal rigidities. It uses a unique dataset collected through a firm-level survey conducted in 17 European countries and covering various sectors. Several conclusions are drawn from this evidence. Firms adjust wages less frequently than prices, on average every 15 and 10 months, respectively. Price and, especially, wage adjustment exhibit a substantial degree of time-dependence. In particular, wage changes tend to cluster at a specific time of the year, mostly January in the majority of countries. The results of a multivariate analysis indicate that prices are more flexible when competitive pressures in product markets are strong and when labor costs account for a lower fraction of firms' total costs, whereas wages are more flexible when bargaining is decentralized and when the coverage of collective bargaining and the stringency of employment protection legislation are low. Price rigidities are higher in firms with a larger share of high-skilled/white-collar workers.