ACCOUNTING FOR POPULATION AGEING IN TAX MICROSIMULATION MODELLING BY SURVEY REWEIGHTING*

This paper investigates the use of sample reweighting, in a behavioural tax microsimulation model, to examine the implications for government taxes and expenditure of population ageing in Australia. First, a calibration approach to sample reweighting is described, producing new weights that achieve specified population totals for selected variables. Second, the performance of the Australian Bureau of Statistics’ (ABS) weights provided with the 2000–2001 Survey of Income and Housing Cost (SIHC) was examined and it was found that reweighting does not improve the simulation outcomes for the 2001 situation, so the original ABS weights were retained for 2001. Third, the implications of changes in the age distribution of the population were examined, based on population projections to 2050. A ‘pure’ change in the age distribution was examined by keeping the aggregate population size fixed and changing only the relative frequencies in different age‐gender groups. Finally, the effects of a policy change to benefit taper rates in Australia were compared for 2001 and 2050 population weights. It is suggested that this type of exercise provides an insight into the implications for government income tax revenue and social security expenditure of changes in the population, indicating likely pressures for policy changes.     

The Economics of Bipartisan Campaign Reform

This essay evaluates two provisions in the Bipartisan Campaign Reform Act (BCRA): raising contribution limits and banning soft money. The model highlights the importance of marginal cost ratios for candidates and their parties. The results suggest that raising contribution limits protects incumbents. Importantly, this generates efficiency gains that come at the expense of electoral competitiveness. When a party has an advantage in a large number of districts, the soft money ban may also reduce rent‐seeking effort while exacerbating existing advantages. Ultimately, the two provisions underscore an “equity‐efficiency” trade‐off. While restricting rent‐seeking effort, they probably lead to less competitive elections.     

THE STRAIGHT STORY ABOUT THE GREENHOUSE EFFECT

During the hot, dry summer of 1988, nearly every newspaper, magazine, and television and radio station in the United States discussed the hot weather and its possible connection with the "greenhouse effect." This public discussion was needed to alert many people to an important topic, but it also led to many misunderstandings about the physical and technical facts and studies involved in considering future climate heating. Some of these misunderstandings originate with the media, some result from the manner in which climate modelers make heating calculations, and a few result from words having meanings that are slightly different to scientists than they are to the general public. The most basic facts that one must understand are as follows, (i) Theory foreseeing a rapid climate heating during the coming decades is based on some of the best understood features of the atmosphere, (ii) The average surface temperature of the earth has increased during the past 120 years, but this increase has been far from uniform and does not prove or disprove that a climate heating is under way. (Hi) The technology is available to begin decreasing rapidly the emission of infrared-trapping gases.     

ECONOMIC VALUATION OF ACID DEPOSITION DAMAGES

This paper summarizes estimates of the monetary value of the physical damages that acid deposition causes in the United States. These estimates were developed for the Interim Assessment of the National Acid Precipitation Assessment Program (NAPAP) but were not included in the final version of the assessment report. This paper describes this research and discusses why these estimates received so little support within the NAPAP. It outlines the role of economics in the current Integrated Assessment and discusses the extent to which lessons learned earlier have been integrated into the current assessment.     

IMPLICATIONS OF LIBERALISED EUROPEAN LABOUR MARKETS

This paper reviews the alternative labour market scenarios open to European policymakers in the current movement towards enhanced economic and political integration. To clarify the various issues, the paper dichotomises the policy alternatives into two camps: "euro-liberalists" and "euro-regulators." The paper concludes that the latter offers the best path towards convergence, with the proviso that the subject of regulation is a Pan-European system of labour market objectives rather than institutions.     

HOW MUCH DO STUDENTS MATTER? APPLYING THE OAXACA DECOMPOSITION TO EXPLAIN DETERMINANTS OF ADEQUATE YEARLY PROGRESS

The federal government and many state governments have recently passed legislation that punishes school districts for not showing consistent improvement in standardized test scores. This article measures the extent to which school performance reflects student characteristics. After splitting schools in the state of Washington based on adequate yearly progress, the authors find that an overwhelming percentage of the difference between high- and low-performing schools is explained by characteristics beyond the control of school administrators. Thus legislation designed to penalize poorly performing schools may hurt students who are most in need of academic aid. (JEL I2 )     

SENSITIVITY ANALYSIS IN BENEFIT COST ANALYSIS: A KEY TO INCREASED USE AND ACCEPTANCE

"We must insist that all empirical studies offer convincing evidence of inferential sturdiness."
Sensitivit     

What Is Best for Workers? The Implications of Workplace and Human Resource Management Practices Revisited

Drawing on a 2003–2004 random household telephone survey of 750 Canadian workers, I explore the implications of work and human resource (HR) practices for six aspects of the quality of working life. I find “traditional” HR practices, associated with the bureaucratic model predominant after World War II and with union representation, to have strong positive implications for workers. Participative workplace practices also have strong positive implications, although these are largely limited to information sharing in the union sector. The actual organization of work (e.g., teams), contingent pay, and “new” HR practices, associated with the “new” HRM of the 1980s, all make little difference. Comparison of these findings with those from a comparable 1998 survey of 508 Canadian workers and a parallel 2003 survey of 450 English workers suggest, however, that the implications of work and HR practices may be historically and institutionally contingent and thus should be interpreted using a historical/institutional perspective.     

The market for American state government bonds in Britain and the United States, 1830–431

In the 1830s the British and American economies were hit by a series of shared macroeconomic shocks. This paper investigates the role of markets for America's State bonds in Britain and the USA during and between the crises in 1837, 1839, and 1842.There is strong evidence that the crises in 1839 and 1842 originated in the USA and spread to Britain. There is also strong evidence that credit markets for American state bonds were tighter in the USA than in London between 1839 and 1842. The idea that the depression that began in 1839 in the USA was triggered by credit conditions in Britain and transmitted via the market for state credit, finds no support here.