Does privatization of daycare affect maternal employment?

This article is the first attempt to examine the privatization effects of daycare centres on the employment of mothers with preschool children. Analysing newly constructed municipality-level data for 2000, 2005 and 2010 in Japan, the results suggest that an increased proportion of private daycare centres has positive effects on mothers’ labour force participation, and the effects are large for municipalities in Tokyo metropolitan area.     

A simple accounting framework for the effect of resource misallocation on aggregate productivity

This paper develops a simple accounting framework that measures the effect of resource misallocation on aggregate productivity. This framework is based on a multi-sector equilibrium model with sector-specific frictions in the form of taxes on sectoral factor inputs. Our framework is flexible for the assumption on preferences or aggregate production functions. Moreover, this framework is consistent with that commonly used in productivity analysis. I apply this framework to measure the extent to which resource misallocation explains the difference in aggregate productivity across developed countries. I find that around 9 percentage points of the difference in the measured aggregate productivity between Japan and the US can be accounted for by resource misallocation. Using the framework, I also decompose the causes of the misallocation effect.     

HAVE VEHICLE REGISTRATION RESTRICTIONS IMPROVED URBAN AIR QUALITY IN JAPAN?

About 2.6 million noncompliant vehicles were removed from designated metropolitan areas in Japan after the introduction of vehicle registration restrictions under the 1992 Automobile NOx Control Law. Based on a difference‐in‐differences framework and using a monitor‐level panel dataset for the period January 1981–December 2015, we find that the intervention led to a 3%–6% reduction in the monthly mean ambient concentration of nitrogen dioxide (NO₂) in the treated areas. Back‐of‐the‐envelope calculations identify benefits equal to about US$104 million as a result of reduced mortality from asthma. (JEL Q53, Q58)     

An Axiomatic Foundation of the Multiplicative Human Development Index

The aggregation formula in the Human Development Index (HDI) was changed to a geometric mean in 2010. In this paper, we search for a theoretical justification for employing this new HDI formula. First, we find a maximal class of index functions, what we call quasi‐geometric means, that satisfy symmetry for the characteristics, normalization, and separability. Second, we show that power means are the only quasi‐geometric means satisfying homogeneity. Finally, the new HDI is the only power mean satisfying minimal lower boundedness, which is a local complementability axiom proposed by Herrero et al. (2010).     

Understanding the determinants of rooftop solar installation: evidence from household surveys in Australia

Australia is a world leader in household uptake of solar photovoltaic systems. In this paper, we use household‐level data to identify economic, social, and environmental factors that influence actual uptake and the intention to install. We find that higher net wealth is generally associated with higher likelihood to install. Households that have mortgages, that spend more on electricity, and that pay higher average electricity prices are more likely to intend to install. Environmental preferences and related behaviours, property tenure, and space constraints are associated with both actual uptake and intention to install. We use data from the Survey of Income and Housing of 2015‐16 and the Household Energy Consumption Survey of 2012.     

The Logic of the Survival of North Korea

Why has North Korea been able to survive up to now, while other rogue states such as Afghanistan and Iraq have suffered military intervention by the USA? To solve this puzzle, we present a simple two‐level game model that takes into account strategic interdependence between intrastate and interstate wars. Using the two‐level game framework, we show that the ethnic homogeneity of North Korea helps defend itself from US armed intervention, whereas a rogue state with a relatively heterogeneous society is expected to experience international insecurity by providing the USA with an opportunity to find domestic allies that help it win an interstate war against the rogue state. As a policy implication, we discuss the possibility that the recent development of a market economy in North Korea might destabilize the peace between the USA and North Korea.     

Network Effects on Trade in Intermediate Goods: Evidence from the Automobile Industry

Growing production fragmentation makes the analysis of network effects on trade in intermediate goods more important than ever. The present study measures network effects on auto parts exports from 6 major auto producing countries using a panel data set covering 49 destinations and 31 products from 2002 to 2008. In contrast to prior research, the present study finds that in the case of Japanese automakers, overseas production by subsidiary plants is less important in determining auto parts exports from Japan than it is for the other major auto producing countries. Such uniqueness could be led by the higher reliance on domestic procurements of overseas subsidiaries of Japanese automakers as a result of the transfer of the vertical networks between automakers and parts suppliers formed in Japan.