Retirement Reforms: Occupational Strain and Health

A concurrent increase in the demand for state age pensions and health care has led to reforms in delaying retirement. We employ thirteen waves of longitudinal data to examine the mental and physical health effects of Australian men and women at “early” and “traditional” retirement. We use before and after propensity score matching (PSM) estimates between treatment and control groups of retired and not retired individuals aged 60 and 65 years. The results indicate a negative health effect according to occupational strain for both genders but a positive mental health effect for retirees with access to self‐funded retirement.     

Preferences, continuity, and the arbitrage pricing theory

This article investigates the structure on preferences requiredto derive Ross's arbitrage pricing theory (APT). It is shownthat only ordinal preferences are required. In particular, theAPT does not require that agents possess preferences representableas risk-averse expected utility functions. This characteristicof the APT is not shared by the standard equilibrium-based capitalasset pricing models.     

Strength in diversity? Fiscal federalism among the fifty US states

Fiscal federalism in the USA has a distinctive structure that contrasts sharply with that in most other industrialized nations. Our purpose in this paper is to describe and explore the US “brand” of fiscal federalism. We demonstrate that there is a striking amount of variety in the 50 state fiscal systems and that these differences have prevailed in the face of potentially disruptive forces. The variety we find stems in large part from states having meaningful fiscal autonomy, in particular, the authority to levy taxes. The result is likely higher societal welfare than would ensue without this autonomy.     

Leisure co‐participant preferences of the elderly: Age‐homogeneity versus age‐heterogeneity

Abstract

Leisure participation often occurs in the company of others. Therefore, identifying the nature of preferred others is important in understanding antecedent conditions which facilitate the leisure experience. A major characteristic in determining co‐participant preferences of the elderly is the preferred age of others involved in the activity. This study was conducted to determine whether older individuals prefer to interact with age‐peers or with younger individuals when participating in 19 selected leisure activities. Results indicated a preference for age‐heterogeneity in interaction. However, old respondents were more likely to select old co‐participants than were young respondents.     

How Quickly Do Firms Adjust to Optimal Levels of Tax Avoidance?

The trade‐off literature asserts that managers weigh the direct benefits of tax avoidance against the associated nontax costs. This literature implies each firm has a unique optimal level of tax avoidance that balances these costs and benefits. Our study is the first to document how quickly the average firm moves toward its optimal level of tax avoidance. We find that the typical firm converges toward its optimum at a rate that ranges from approximately 69 to 84 percent over a three‐year period, depending upon model specifications. Consistent with asymmetric levels of frictions across the tax avoidance distribution, we find the speed of adjustment is greater for firms below their optimal level of tax avoidance than for firms above. We perform additional cross‐sectional analyses to provide insight into some of the frictions that prevent firms from adjusting completely to their optimal level of tax avoidance. We generally find growth firms exhibit slower adjustment speeds and provide limited evidence that both multinational firms and income‐mobile firms exhibit faster adjustment speeds.     

Services Trade Liberalisation Strategies for APEC Member Economies

A tribute to a member of our team
The work on measuring restrictions on trade in services would not have been possible without Kaleeswaran Kalirajan. KK, as he was known, was an extremely talented and energetic econometrician who worked tirelessly to develop new methodologies to measure the price and cost effects of restrictions on trade in services. KK died unexpectedly in 2003. He, and his pioneering contribution to this work, will not be forgotten.
APEC member economies are moving forward with liberalising their services markets. They have agreed to free and open trade and investment by 2020. In achieving this goal, APEC member economies can benefit greatly from understanding the effects of removing certain types of restrictions. This article brings together, for the first time, comprehensive measures of restrictions on trade in services and their liberalisation effects. APEC member economies can use these measures and analysis to devise strategies to pursue further services trade liberalisation.     

Exposure Triggers and Allocation Methods: Learning Lessons From Prior Court Rulings

This study provides a review of some of the major court rulings that have shaped and continue to shape the commercial general liability (CGL) market. The evolution of the concepts of "triggers" and allocations systems is examined to gain a perspective on the way in which courts reinterpret contract language to apply to new and emerging exposures. A review of the issues impacting the CGL provides valuable insights into the way court rulings can create a significant impact in the insurance market. A stream of court decisions provides the backdrop for today's challenges, including the reemergence of asbestos claims. The study also fills a gap in the literature related to the crisis in the CGL marketplace and changes in the pricing, regulation, and solvency of insurers operating in those lines. As old risks continue to evolve and new risks emerge, courts have begun to reinterpret liability contracts in much the same way as they reinterpreted contracts with regard to pollution and products in the 1970s and 1980s. Recent rulings related to asbestos and environmental liability underscore the importance of these issues in today's marketplace. By reviewing these events related to the CGL policy, insurers, insureds, and regulators may gain a new perspective on the importance of developing a clear standard wording that will be consistently interpreted in light of new exposures.