Marking Time: An Analysis of Youth Hours of Work and Study in Urban Mexico

This paper argues that a more complex view of work and schooling is critical to poor countries as they implement policies to increase educational attainment. In this analysis of 12–17‐year‐old girls and boys in urban Mexico, we expand the traditional approach in two dimensions by (1) moving from an analysis of participation to one of hours of participation, and (2) broadening the definition of work to include youth's household responsibilities.     

Judgemental Overconfidence, Self-Monitoring, and Trading Performance in an Experimental Financial Market

We measure the degree of overconfidence in judgement (in the form of miscalibration, i.e. the tendency to overestimate the precision of one's information) and self-monitoring (a form of attentiveness to social cues) of 245 participants and also observe their behaviour in an experimental financial market under asymmetric information. Miscalibrated traders, underestimating the conditional uncertainty about the asset value, are expected to be especially vulnerable to the winner's curse. High self-monitors are expected to behave strategically and achieve superior results. Our empirical results show that miscalibration reduces and self-monitoring enhances trading performance. The effect of the psychological variables is strong for men but non-existent for women.     

The Political Economy of Xenophobia and Distribution: The Case of Denmark*

For the first time in some years, a conservative government came to power in Denmark in 2001, due primarily to the citizenry's disaffection with social‐democratic policies on immigration. We represent political competition in Denmark as taking place over two issues—the size of the public sector and immigration—and model political equilibrium using the party unanimity Nash equilibrium (PUNE) concept, which generates equilibria on multi‐dimensional policy spaces where parties form endogenously. By fitting the model to Danish data, we argue that citizen xenophobia may be expected to decrease the size of the Danish public sector by an amount between 12% and 36% of one standard deviation of the probability distribution of citizens' ideal points of the size of the public sector.     

Job market outcomes for IDPs: The case of Georgia

Internally displaced people (IDPs) constitute a serious economic, social and cultural problem for many countries, including countries in transition. Despite the importance of the problem, there are only a handful of previous studies investigating the issue of labour market outcomes for IDPs. Moreover, the impact of protracted displacement has not been addressed in academic work at all. We aim to fill this gap in the literature using 13 years (2004–2016) of Integrated Household Surveys from Georgia, which has experienced a large flow of internal migrants from the early 1990s until now. Our analyses indicate that the labour market outcomes for IDPs are much worse than those for local residents. Specifically, IDPs are 3.9–11.2 percentage points less likely to be in the labour force, depending on the period and duration of IDP status. IDPs are also up to 11.6 percentage points more likely to be unemployed, even after 20 years of forced displacement. Finally, IDPs residing in a locality for more than five years receive persistently lower wages than local residents with similar characteristics, with the gap widening over time, reaching some 11% in the last period under analysis.     

ON THE INTERPRETATION AND APPLICABILITY OF A "GREEN NATIONAL PRODUCT"

Several economists have recently suggested that the national product should be adjusted for the value of environmental damages. In this paper we look at some of the difficulties one encounters when the correcting formulae derived from simple theoretical models are transferred to applied national accounting. In particular, the paper is concerned with the question of whether a corrected national income measure will actually provide relevant information for policy-makers.
It is shown that a "green national product" will be very difficult to interpret. In general, it may not give any indications of the necessity of imposing stronger environmental policy actions. Nor does it indicate the hypothetical state of the economy after a change in environmental efforts.     

Allowing disagreement in evaluations of social welfare

There is no consensus on how to measure interpersonally comparable, cardinal utility. Despite of this, people repeatedly make welfare evaluations in their everyday lives. However, people do not always agree on such evaluations, and this is one important reason for political disagreements. Thus, to keep in control of the normative premises, decision makers may prefer information which can be used as input to an arbitrary social welfare function to information which is the output from a social welfare function specified by the analyst. In this paper we try to identify and simplify sufficient welfare indicators; information which enables decision makers to arrive at welfare evaluations of social states or projects, according to their own ethical beliefs. Our conclusion is that providing factual information about different population groups, their social state, size, and characteristics, may be better for this purpose than the more traditional approach of focusing on ordinal utility information.     

Tax Policies and Informal Employment: The Asian Experience

This paper develops and estimates a model linking tax policies to the size of the informal sector. Our results suggest that informal employment responds to the strength of enforcement and, to a lesser extent, to tax rates. Looking across sectors, we find service sector informal employment responds to both changes in tax rates and enforcement, while manufacturing sector informal employment responds only to enforcement. Quantitatively, changes in enforcement affect the manufacturing informal sector more than the service sector. These results are robust to various measures of informal employment and hold for other countries outside of Asia as well. Since informal employment (and hence output) is related to a country's GDP, these results suggest that policy makers should consider the effect of their policies on the size of the informal sector.
JEL classification : O 17; O 53; H 26     

The OECD's new global model

This paper provides a summary of the OECD's new global macroeconometric model, including an overview of model structure and a selection of simulations illustrating its main properties. Compared with its predecessors, the new model is more compact and regionally aggregated, but gives more weight to the focus of policy interests in global trade and financial linkages. The country model structures typically combine short-term Keynesian-type dynamics with a consistent long-run neo-classical supply-side. While retaining a conventional treatment of international trade and payments linkages, the model has a greater degree of stock-flow consistency, with explicit modelling of domestic and international assets, liabilities and associated income streams. Account is also taken of the influence of financial and housing market developments on asset valuation and domestic expenditures via house and equity prices, interest rates and exchange rates. As a result, the model gives more prominence to wealth and wealth effects in determining longer-term outcomes and the role of asset prices in the transmission of international shocks both to goods and financial markets.     

Does the world real interest rate affect the real exchange rate? The South East Asian experience

Abstract

We analyze the consequences of US real interest rate rises on the real exchange rate (RER) in a two-good overlapping generations model of a semi-small open economy. The equilibrium RER depreciates (appreciates) when the world interest rate increases in a debtor (creditor) country. We then study empirically the reaction of the RER in a set of South East Asian (SEA) countries to shocks in US real interest rates. The results support the conclusions of the theory model at least for Singapore, Thailand and South Korea during the period 1980 – 2001. This points towards world interest rate shocks as possible trigger factors for exchange rate crises during the adjustment process towards the new equilibrium.