| 1. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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A maximum likelihood bunching estimator of the elasticity of taxable income
- 2024
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Ingår i: Journal of applied econometrics (Chichester, England). - : John Wiley & Sons. - 0883-7252 .- 1099-1255. ; 39:1, s. 200-216
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Tidskriftsartikel (refereegranskat)abstract
- This paper develops a maximum likelihood (ML) bunching estimator of the elasticity of taxable income (ETI). Our structural approach provides a natural framework to simultaneously account for unobserved preference heterogeneity and optimization errors and for measuring their relative importance. We characterize the conditions under which the parameters of the model are identified and show that the ML estimator performs well in terms of bias and precision. The paper also contains an empirical application using Swedish data, showing that both the ETI and the standard deviation of the optimization friction are precisely estimated, albeit relatively small.
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| 2. |
- Aronsson, Thomas, 1963-, et al.
(författare)
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Alternative parametric bunching estimators of the ETI
- 2018
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- We propose a maximum likelihood (ML) based method to improve the bunching approach of measuring the elasticity of taxable income (ETI), and derive the estimator for several model settings that are prevalent in the literature, such as perfect bunching, bunching with optimization frictions, notches, and heterogeneity in the ETI. We show that the ML estimator is more precise and likely less biased than ad-hoc bunching estimators that are typically used in the literature. In the case of optimization frictions in the form of random shocks to earnings, the ML estimation requires a prior of the average size of such shocks. The results obtained in the presence of a notch can differ substantially from those obtained using ad-hoc approaches. If there is heterogeneity in the ETI, the elasticity of the individuals who bunch exceeds the average elasticity in the population.
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| 3. |
- Aronsson, Thomas, 1963-, et al.
(författare)
-
Maximum Likelihood Bunching Estimators of the ETI
- 2021
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- We propose a maximum likelihood method to improve the bunching approach of estimating the elasticity of taxable income (ETI), and derive estimators for several model settings such as bunching with optimization frictions, notches, and heterogeneity in the ETI. Modelling optimization frictions explicitly, our estimators fit the data of several published studies very well. In the presence of a notch, the results can differ substantially from those obtained using the polynomial approach. If there is heterogeneity in the ETI, the elasticity among those who bunch exceeds the average elasticity in the population.
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| 4. |
- Aronsson, Thomas, 1963-, et al.
(författare)
-
The Quality of the Estimators of the ETI
- 2017
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Measuring the elasticity of taxable income (ETI) is central for tax policy design. Yet, there are few arguments which support or infirm that current methods yield measurements of the ETI that can be trusted. Our first purpose is to use simulation methods to assess the bias and precision of the prevalent methods used in the literature (IV estimation and bunching methods). Thereby, we aim at (i) explaining the huge differences in empirical results, and (ii) providing arguments in favor of or against using these methods. Our second purpose is to suggest indirect inference estimation to improve the quality of the measurement. We find that the IV regression estimators may suffer from considerable bias and be quite imprecise, whereas the bunching estimators perform better in our controlled environment. We also show that using more of the information available in the data, estimators based on indirect inference principles produce more precise estimates of the ETI than any of the most commonly used methods.
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| 5. |
- Aronsson, Thomas, 1963-, et al.
(författare)
-
The quality of the estimators of the ETI
- 2022
-
Ingår i: Journal of Public Economics. - : Elsevier. - 0047-2727 .- 1879-2316. ; 212
-
Tidskriftsartikel (refereegranskat)abstract
- The elasticity of taxable income (ETI) is a central statistic for tax policy design. One purpose of the present paper is to use Monte Carlo simulation techniques to assess the bias and precision of the prevalent estimators in the literature, the IV-regression estimator and the bunching estimator. Thereby, we aim to provide arguments in favor of, or against, using these methods. Another is to suggest indirect inference estimation to improve the quality of the measurement of the ETI. While IV-regression estimators perform well in terms of bias under certain conditions, they are more variable than bunching estimators. We also find that bunching estimators can be biased downward. The estimators based on indirect inference principles are practically unbiased and more precise than the other estimators.
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| 6. |
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| 7. |
- Bingley, Paul, et al.
(författare)
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Employer Pay Policies, Public Transfers and the Retirement Decisions of Men and Women in Denmark
- 2004
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Ingår i: European Economic Review. - : Elsevier. - 0014-2921 .- 1873-572X. ; 48:1, s. 181-200
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Tidskriftsartikel (refereegranskat)abstract
- The empirical retirement literature measures individual responses to variations in income flows due to public transfers, private individual or employer-provided pensions. We estimate a model accounting for the incentive effects from these sources. A dynamic structural model is extended to allow both individual and employer heterogeneity. This is applied to a Danish matched panel of workers and establishments, spanning a period of reforms to a public early retirement programme. Employer-specific compensation is found to be an important determinant of work and retirement income flows. Employer effects on retirement age are only found among sub-samples where access to public transfers is limited.
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| 8. |
- Bingley, Paul, et al.
(författare)
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Public pension programmes and the retirement of married couples in Denmark
- 2007
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Ingår i: Journal of Public Economics. - : Elsevier. - 0047-2727 .- 1879-2316. ; 91:10, s. 1878-1901
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Tidskriftsartikel (refereegranskat)abstract
- In this paper we study the economic determinants of the joint retirement process of married couples. We propose a tractable dynamic discrete choice model for retirement decisions which allows for non-trivial saving behaviour. We estimate the model on a 1% sample of Danish couples of potential retirement age drawn from a population-based administrative register. The introduction and subsequent reforms of a publicly financed early retirement programme provide us with variation in the data to insure identification of the parameters of interest: the elasticities of participation/retirement with respect to income flows. Our estimates imply a significant asymmetry in the sensitivity of retirement behaviour of men and women with respect to variation in their own, or their spouse's, income flows.
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| 9. |
- Bingley, Paul, et al.
(författare)
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The Incidence of Income Tax on Wages and Labour Supply
- 2002
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Ingår i: Journal of Public Economics. - : Elsevier. - 0047-2727 .- 1879-2316. ; 83:2, s. 173-194
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Tidskriftsartikel (refereegranskat)abstract
- In the simple framework of a static model for equilibrium wages and labour supplies, we show that the incidence of income tax on equilibrium wages can be measured independently from the individual labour supply elasticity. This extends recent work by [Journal of Labour Economics, 15(3) (1997) S72-S101] and [Journal of Public Economics, 65 (1997) 119-145], who estimate tax incidence on earnings, and [Econometrica, 66(4) (1998) 827-861] and [NBER Working Paper 5023 (1995)], who estimate labour supply elasticities, Our measurements are based on a large multi-level longitudinal data set of Danish private sector establishments and workers. We show that, allowing for labour supply response, there is strong evidence for partial shifting of the burden of income tax from worker to employer. Higher marginal tax rates are associated with increases in gross wages and earnings
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| 10. |
- Bäckström, Peter, 1985-
(författare)
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Empirical essays on military service and the labour market
- 2023
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Doktorsavhandling (övrigt vetenskapligt/konstnärligt)abstract
- This thesis consists of an introductory part and four self-contained papers that study empirical questions related to military service and the labour market.Paper [I] studies the relationship between civilian labour market conditions and the number of people who volunteer for military service in Sweden. I use panel data on Swedish counties for the years 2011 through 2015 and study the effect of civilian unemployment on the rate of applications from individuals aged 18 to 25 to initiate basic military training. The results indicate a positive and statistically significant relationship between the unemployment rate and the application rate, and suggest that the civilian labour market environment can give rise to non-trivial fluctuations in the supply of volunteers to the Swedish military.Paper [II] studies how local labour market conditions influence the quality composition of those who volunteer for military service in Sweden. I estimate a fixed-effects regression model on a panel data set containing cognitive ability test scores for those who applied for military basic training across Swedish municipalities during the period 2010 to 2016. The main finding is that if civilian employment rates at the local level go up, the average test score of those who volunteer for military service goes down. The results suggest that, due to the way in which different types of individuals select themselves into the military, the negative impact of a strong civilian economy on recruitment volumes is reinforced by a deterioration in recruit quality.Paper [III] studies the effect of peacekeeping on post-deployment earnings for military veterans. Using Swedish administrative data, we follow a sample of more than 11,000 veterans who were deployed for the first time during the period 1993-2010 for up to nine years after returning home. To deal with selection bias, we use difference-in-differences propensity score matching based on a rich set of covariates, including measures of individual ability, health and pre-deployment labour market attachment. We find that, overall, veterans’ post-deployment earnings are largely unaffected by their service. Even though Swedish veterans in the studied period tend to outperform their birth-cohort peers who did not serve, we show that this advantage in earnings disappears once we adjust for non-random selection into service. Paper [IV] studies the relationship between military deployment to Bosnia in the 1990s and adverse outcomes on the labour market. The analysis is based on longitudinal administrative data for a sample of 2275 young Swedish veterans who served as peacekeepers in Bosnia at some point during the years 1993–1999. I follow these veterans for up to 20 years after deployment. Using propensity score matching based on a rich set of covariates, I estimate the effects of deployment on three broad measures of labour market marginalisation: long-term unemployment, work disability, and social-welfare assistance. I find no indication of long-term labour market marginalisation of the veterans. Even though the veterans experienced an increase in the risk of unemployment in the years immediately following return from service, in the long run their attachment to the labour market is not affected negatively by their service.
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| 11. |
- Bäckström, Peter, 1985-
(författare)
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Essays on military labour supply in the era of voluntary recruitment
- 2020
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Licentiatavhandling (övrigt vetenskapligt/konstnärligt)abstract
- This thesis consists of an introductory part and two self-contained chapters related to the supply of volunteers to the Swedish Armed Forces.Chapter [I] represents the first effort to explore the relationship between civilian labour market conditions and the supply of labour to the military in the all-volunteer environment that Sweden entered after the abolishment of the peacetime draft in 2010. The effect of civilian unemployment on the rate of applications from individuals aged 18 to 25 to initiate basic military training is investigated using panel data on Swedish counties for the years 2011 through 2015. A linear fixed-effects model is estimated to investigate the relationship, while controlling for a range of socio-demographic covariates and unobserved heterogeneity on the regional level, as well as aggregate trends on the national level. The results indicate a positive and statistically significant relationship between the unemployment rate and the application rate. The results are robust to non-linear form specifications, as well as allowing the civilian unemployment rate to be endogenous. As such, the results suggest that the civilian labour market environment in Sweden can give rise to non-trivial fluctuations in the supply of applications to initiate basic military training within the Swedish Armed Forces.Chapter [II] studies how local labour market conditions influence the quality composition of those who volunteer for military service in Sweden. A fixed-effects regression model is estimated on a panel data set containing IQ scores for those who applied for military basic training across Swedish municipalities during the period 2010 to 2016. The main finding is that low civilian employment rates at the local level tend to increase the mean IQ score of those who volunteer for military service, whereas the opposite is true if employment rates in the civilian labour market move in a more favourable direction. As such, the results suggest that the negative impact of a strong civilian economy on recruitment volumes is reinforced by a deterioration in recruit quality.
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| 12. |
- Chevalier, Arnaud, et al.
(författare)
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Monotonicity and the Roy Model
- 2004
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Ingår i: Manchester School. - : John Wiley & Sons. - 1463-6786 .- 1467-9957. ; 72:4, s. 560-567
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Tidskriftsartikel (refereegranskat)abstract
- In this note we study the implications on a bivariate normal Roy model of two sets of monotonicity hypotheses proposed recently by Manski and Pepper (Econometrica, Vol. 64 (2000), pp. 997–1011). In that simple context, we show that these hypotheses imply strong restrictions on the correlations structure between the decision and the rewards.
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| 13. |
- Devereux, Michael, et al.
(författare)
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Measuring tax incidence : an application to mortgage provision in the UK
- 2003
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Ingår i: Journal of Public Economics. - : Elsevier. - 0047-2727 .- 1879-2316. ; 87:7-8, s. 1747-1778
-
Tidskriftsartikel (refereegranskat)abstract
- This paper derives measures of the average and marginal incidence of a tax or subsidy in imperfect competition, in the context of the UK housing market. We argue that one form of mortgage, common in the UK but not elsewhere (the endowment mortgage), exists primarily because of the structure of taxation in the UK. We estimate the determinants of the choice of the type of mortgage, and the size of mortgage conditional on the choice, using data from the Building Societies Association on 43 000 individual mortgages taken out between 1985 and 1989. The estimated parameters are an input to the incidence measures. Results suggest that between 70 and 80% of the additional subsidy to endowment mortgages is captured by lenders, rather than borrowers.
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| 14. |
- Farrell, Lisa, et al.
(författare)
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The demand for lotto : the role of conscious selection
- 2000
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Ingår i: Journal of business & economic statistics. - : American Statistical Assoication. - 0735-0015 .- 1537-2707. ; 18:2, s. 228-241
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Tidskriftsartikel (refereegranskat)abstract
- This article presents estimates of the elasticity of demand for lottery tickets using time series data in which there is variation in the expected value of a lottery ticket induced by rollovers. An important feature of our data is that there are far more rollovers than expected given the lottery design. We find strong evidence that individuals do not choose their lottery numbers uniformly from a uniform distribution-that is, conscious selection. We use our estimates to derive the inverse supply function for the industry, and this enables us to identify the demand elasticity. We find the price elasticity to be close to unity, which implies that the operator is revenue maximizing-which is the regulator's objective.
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| 15. |
- Gustafsson, Johan, 1993-
(författare)
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Essays on labor supply, pension policy, and inequality
- 2021
-
Doktorsavhandling (övrigt vetenskapligt/konstnärligt)abstract
- Paper [I] analyzes the dynamic properties of life-cycle earnings in Sweden using microdata. We study the evolution of permanent and transitory earnings inequality over the period 2002--2015. Our data comes from administrative records gathered in the ASTRID database. We find that some features of the data do not match the predictions of the heterogeneous or restricted income profile models commonly applied in the earning dynamics literature. Instead, we estimate an alternative permanent-transitory (PT) error components model. Analyzing the covariance structure of both male and female earnings, controlling for educational background, we find that the upward trend in permanent earnings inequality observed in Sweden during the 1990s does not continue in the 2000s, and the financial crisis of 2008 did not have any major impact on the variability of earnings. We further simulate the accumulation of income pension entitlements and find that variations in pension entitlements are smaller among college-educated workers. Paper [II] studies the life-cycle effects of favorable marginal tax treatment on older workers' optimal life-cycle labor supply, retirement timing, and savings. I develop a structural model in continuous time where the life cycle of a representative agent is divided into three distinct phases: pre-treatment, post-treatment, and retirement. Solutions for consumption and savings, labor supply and leisure, and retirement timing are then obtained by solving the model as a salvage value problem. I then calibrate the model to Swedish earnings data and find that the increased extensive margin labor supply is partially offset by a reduction in hours worked during the pre-treatment period. The total effect, however, is an increase in life-cycle labor supply and consumption. \\Paper [III] studies the implications of the structure of public pension programs for the trade-offs determining economic behavior over the life cycle. The economy is modeled as a continuous-time overlapping generations model with endogenous labor supply, savings, and human capital formation. Individuals differ in ability and are free to choose how much to work at each period in time and when to enter and exit the labor market. Numerical simulations provide qualitative insights that a redistributive pension system introduces opposite effects on the incentives for retirement for high- and low-skilled individuals, which leads to increased earnings inequality. This effect can, in turn, dominate reduced pension inequality such that lifetime and population-wide income inequality increase. Ultimately, the equity–efficiency trade-off is found to be difficult to characterize. \noindent \\Paper [IV] explores the effects of pension illiteracy on aggregate labor supply and the redistributive performance of public pension systems. I consider an OLG model in continuous time populated with individuals who differ in labor productivity and pension literacy. Agents suffering from pension illiteracy fail to fully account for the structure of the pension system when planning their economic behavior over the life cycle. I find that pension illiteracy can negatively impact aggregate labor supply and increase earnings inequality and lifetime income inequality. This suggests that pension illiteracy may limit the efficiency gains of an increased correlation between individual contributions and benefits, making the equity–efficiency trade-off difficult to characterize in the context of pension reforms.
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| 16. |
- Hartley, Roger, et al.
(författare)
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Heterogeneous demand responses to discrete price changes : an application to the purchase of lottery tickets
- 2006
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Ingår i: Computational Statistics & Data Analysis. - : Association for Computing Machinery. - 0167-9473 .- 1872-7352. ; 50:3, s. 859-877
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Tidskriftsartikel (refereegranskat)abstract
- During the survey period of any household expenditure survey price variations may occur. Such variation can be used to identify heterogeneous demand responses to price changes. This is feasible because expenditure surveys usually contain a large number of observations. The principal difficulty for estimation arises because of the sampling process which generates the data. An estimable model of individual purchase is presented and is estimated in the case of the demand for lottery tickets. This model allows identification of heterogeneous responses to changes in the rollover state (i.e. whether last week's jackpot has been added to the current jackpot). The distribution of heterogeneous responses, in the form of a bivariate mixing distribution, is shown to be identified from the available data. The EM algorithm is used to estimate the parameters of the mixing distribution. The estimates imply that there is substantial heterogeneity in the population both in the normal expenditure levels and in the reaction to a jackpot rolled over.
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| 17. |
- Hartley, Roger, et al.
(författare)
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On the design of lottery games
- 2003
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Ingår i: Journal of the Operational Research Society. - : Palgrave Macmillan. - 0160-5682 .- 1476-9360. ; 54:1, s. 89-100
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Tidskriftsartikel (refereegranskat)abstract
- We describe a model of participation in lottery games designed to address the optimisation of tax revenue in state-sponsored lotteries. The model treats participants dynamically and examines a long-run equilibrium. A novel high frequency approximation is used to turn the problem into a static, state-contingent deterministic programming problem. We demonstrate that the solution of this problem has qualitatively plausible properties and then calibrate the model against the United Kingdom National Lottery (UKNL). The results suggest that the current design of the UKNL may not be maximising tax revenue.
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| 18. |
- Holmberg, Johan, 1994-
(författare)
-
Essays on earnings formation, labor market dynamics, and taxation
- 2021
-
Doktorsavhandling (övrigt vetenskapligt/konstnärligt)abstract
- Chapter [I] analyses the dynamic properties of life-cycle earnings of men and women in Sweden by fitting a model to the covariance structure of earnings. We find that the financial crisis of 2008 did not have any major impact on the variability of earnings and that the upward trend in permanent earnings inequality observed in Sweden during the 1990s does not continue in the 2000s. Using the model to simulate the accumulation of income pension entitlements, we find that college-educated workers have smaller variations in pension entitlements than workers with less education.Chapter [II] presents a life-cycle earnings dynamics model that includes endogenous employment and job change. The model is estimated on Swedish register data using indirect inference. By simulating data from this model, we study the macroeconomic consequences of transitory shocks to unemployment risk, how unemployment at different ages affects the accumulation of pension entitlements, and analyze how different factors contribute to earnings inequality. We find that transitory aggregate shocks to unemployment risk have long-lasting negative effects on employment and earnings, that becoming unemployed at age 40 has a large negative effect on pension accumulations, and that unobserved individual heterogeneity contributes substantially to the observed life-cycle earnings inequality for both men and women in Sweden.Chapter [III] presents a model of earnings dynamics that includes transitions in and out of employment and business cycle fluctuations. The model is estimated using indirect inference and a mix of Swedish register, survey and macro data. We find that the transitions from unemployment to employment are more sensitive to business cycle fluctuations than the probability of remaining employed. By simulating data from the model, we find that the business cycle has a relatively small impact on earnings inequality in Sweden and that young workers are more sensitive to business cycle fluctuations than older workers.Chapter [IV] deals with optimal nonlinear taxation of income and profits in a general equilibrium model with frictional unemployment. We find that the government can achieve redistribution of income through taxation without distorting production efficiency. This outcome is possible if the government uses two nonlinear tax instruments, taxing profits and labor income separately. The results also show that including involuntary unemployment creates an incentive to tax entrepreneurial income at lower marginal rates and labor income at higher marginal rates than otherwise.
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| 19. |
- Laffond, Gilbert, et al.
(författare)
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Un modèle dynamique de compétition électorale
- 2000
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Ingår i: Décision, prospective, auto-organisation. - Paris : Dunod Editeur. - 2100046535 ; , s. 425-454
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Bokkapitel (övrigt vetenskapligt/konstnärligt)
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| 20. |
- Lanot, Gauthier, et al.
(författare)
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An empirical model of the decision to switch between electricity price contracts
- 2019
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Ingår i: Journal of Business Analytics. - : Taylor & Francis. - 2573-234X .- 2573-2358. ; 2:1
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Tidskriftsartikel (refereegranskat)abstract
- In this paper, we explore how sensitive the timing of switches between electricity contracts is to current and past prices. We present a model for time series of individual binary decisions which depends on the history of past and present prices. The model is based on the Bayesian learning procedure which is at the core of sequential decision-making. Given a-priori distributions of the information conditional on the state of the world, we show that the model captures dependence on past prices in a straightforward fashion. We estimate by maximum likelihood the parameters of the model on a sample of Swedish households who decide over time between competing electricity price contracts. The estimated parameters suggest that households do respond to prices by switching between contracts and that the response to price can be sizeable for alternative price processes. Importantly, the model structure implies that in general, the response to a price change will not be immediate but delayed.
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| 21. |
- Lanot, Gauthier, et al.
(författare)
-
An empirical model of the decision to switch betweenelectricity price contracts
- 2017
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- We present a novel model for a time series of individual binary decisions which depends on the history of prices. The model is based on the Bayesian learning procedure which is at the core of sequential decision making. We show that the model capture dependence on past events and past priors in a straightforward fashion, the model capture some dependence on initial condition, here in the form of the prior at the start of the decision period, and that estimation through maximum likelihood is straightforward. We estimate the parameters of the model on a sample of Swedish households who have to decide over time between competing electricity contracts. The estimated parameters suggest that households respond to prices by switching between contracts, and that the response can be rather substantial for alternative price processes
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| 22. |
- Lanot, Gauthier, et al.
(författare)
-
Before political economy: debate over grain markets, dearth and pauperism in England, 1794–96
- 2024
-
Ingår i: History of European Ideas. - : Routledge. - 0191-6599 .- 1873-541X.
-
Tidskriftsartikel (refereegranskat)abstract
- During the 1790s Britain experienced a series of poor harvests which, given an expanding population and wartime disruption to the European grain trade, caused sudden and rapid increases in the domestic price of wheat. In modern discussion of Corn and Poor Laws the severity of these fluctuations has been obscured by the use of annual average grain prices, despite weekly county prices being available from 1771 as published in the London Gazette. We highlight the uncertainties of grain prices during the period 1794-96, drawing upon contemporary discussion published in the Annals of Agriculture of the problems arising from fluctuations in the price of wheat. Our purpose is to demonstrate that the tropes usually today associated with the Corn and Poor Laws – pauperism, a clash between merchant, manufacturing and landlord interests, population and impoverishment – are absent from discussion during this period. A doctrinaire “political economy” would develop in the early 1800s, but did not yet exist. Policy argument drew upon casuistic reasoning from circumstance and past experience. We also show in conclusion that Edmund Burke’s Thoughts and Details on Scarcity cannot be linked to “political economy”.
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| 23. |
- Lanot, Gauthier
(författare)
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French idiosyncracies
- 2016
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Ingår i: The contradictions of Capital in the twenty-first century. - : Agenda. - 9781911116103 - 9781911116110 ; , s. 67-85
-
Bokkapitel (övrigt vetenskapligt/konstnärligt)
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| 24. |
- Lanot, Gauthier
(författare)
-
Maximum likelihood and economic modeling : maximum likelihood is a general and flexible method to estimate the parameters of models in labor economics
- 2017
-
Ingår i: IZA World of Labor. - : Forschungsinstitut zur Zukunft der Arbeit GmbH. - 2054-9571.
-
Tidskriftsartikel (refereegranskat)abstract
- The data available to economists is rarely the outcome of natural or quasi experiments. Inaddition, it is common for distinct individuals to exhibit similar responses in a given environment whileobservationally identical individuals will respond differently to similar incentives. In such situations the useof an economic model fitted using maximum likelihood methods provide a general approach to thedescription of the observed data whatever its nature. The predictions obtained from a fitted model providecrucial information about the distributional consequences of economic policies.
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| 25. |
- Lanot, Gauthier, et al.
(författare)
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Mortgage loan characteristics, unobserved heterogeneity and the performance of United Kingdom securitised sub-prime loans
-
Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- The research estimates a competing risk model of mortgage terminations on samples of UK securitised subprime mortgages. Given the argued role of these types of loan in the recent financial crisis then it is important to better understand their performance and supposed idiosyncratic behaviour. The methodological and empirical advance is the use of a general, flexible modelling of unobserved heterogeneity over several dimensions, controlling for both selection issues involving initial mortgage choices and dynamic selection over time. Moreover, we estimate specific coefficients for this unobserved heterogeneity and determine the correlation between the unobserved components of default and prepayment. The paper demonstrates the need for researchers and practitioners to jointly estimate household choices whiles controlling for selectivity through unobserved heterogeneity.
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| 26. |
- Lanot, Gauthier, 1965-, et al.
(författare)
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Mortgage Loan Characteristics, Unobserved Heterogeneity and the Performance of United Kingdom Securitized Subprime Loans
- 2016
-
Ingår i: Real estate economics (Print). - : Wiley. - 1080-8620 .- 1540-6229. ; 44:4, s. 771-813
-
Tidskriftsartikel (refereegranskat)abstract
- We estimate a competing risk model of mortgage terminations on samples of U.K. securitized subprime mortgages. Given the role of these loans in the recent financial crisis it is important to understand their performance and supposed idiosyncratic behavior. We use a flexible modelling of unobserved heterogeneity over several dimensions, controlling for selection issues involving initial mortgage choices and dynamic selection over time. We estimate the characteristics of the unobserved heterogeneity and determine the correlation between the unobserved components of default and prepayment. The paper demonstrates the need to estimate initial household choices and the durations to default or prepayment jointly.
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| 27. |
- Lanot, Gauthier, et al.
(författare)
-
Pension benefit reform and the substitution of older for younger workers
- 2014
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Konferensbidrag (refereegranskat)abstract
- Early pension benefits encourage workers to retire before normal pensionable age. The age structure ofemployment reflects the relative prices of retaining workers of different ages. We use a recent reform to pension benefits in Denmark to analyze the relationship between the wages and employment of workers ofdifferent ages at the firm level. We find that the reform changed retirement ages of unskilled workers – the group with lowest wages and largest replacement rate changes due to the reform. This provides instrumental variables by which to identify parameters of a CES production function. For this group of unskilled workers we are able to estimate the elasticity of substitution between old and young at the firm level to be unity – they are perfect substitutes.
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| 28. |
- Lanot, Gauthier
(författare)
-
The Marginal Rate of Substitution and the Specification of Labour Supply Models
-
Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- In this note I revisit Heckman's proposal, [Heckman, 1974], to specify a static labour supply model using a simple formulation for the Marginal Rate of Substitution between total expenditure on consumption and hours of work. I describe the analytical form of the expenditure function and I show how the direct and indirect utility functions can be recovered. I propose an alternative specification for the MRS and in this case I describe analytically the labour supply functions, the indirect and direct utility functions as well as the expenditure function.
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| 29. |
- Lanot, Gauthier
(författare)
-
The Marginal Rate of Substitution and the Specification of Labour Supply Models
-
Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- In this note I revisit Heckman's proposal, [Heckman, 1974], to specify a static labour supply model using a simple formulation for the Marginal Rate of Substitution between total expenditure on consumption and hours of work. I describe the analytical form of the expenditure function and I show how the direct and indirect utility functions can be recovered. I propose an alternative specification for the MRS and in this case I describe analytically the labour supply functions, the indirect and direct utility functions as well as the expenditure function.
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| 30. |
- Lanot, Gauthier, et al.
(författare)
-
The Minimum Wage and a Non-Competitive Market for Qualifications
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- In this paper we consider an equilibrium model of demand and supply for several qualifications first in a competitive setting and then in a non-competitive setting. We propose a tractable analytical framework, i.e. when workers choose between qualifications according to a multinomial logit model of choice and when a CES production function describes the substitutions possibilities between the different types of labour. While in the competitive case the effects of the minimum wage are those we expect, in the imperfectly competitive case we find that a minimum wage can create unemployment and we find that the welfare of the population as a function of the minimum wage is not unimodal. We show furthermore that allowing one qualification to be exempted from the minimum wage does not mean that its relative demand is unaffected by changes to the minimum wage.
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| 31. |
- Lanot, Gauthier, et al.
(författare)
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The national minimum wage and the substitutability between young and old workers in low paid occupations
- 2017
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Ingår i: Manchester School. - : John Wiley & Sons. - 1463-6786 .- 1467-9957. ; 85:5, s. 601-633
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Tidskriftsartikel (refereegranskat)abstract
- We study the effect of the National Minimum Wage (NMW) on the work force age composition within the low paying sectors of the British economy. Our interest is in the degree of substitutability between labour inputs (young and old employees). We find evidence that both the introduction and the regular upratings of the NMW have a significant effect on the observed changes to the relative wages and tothe relative wage bills but not to relative employment. We estimatethe elasticity of substitution, between “young” age groups and older workers (55+) to be zero, while that of “prime” (22+) age and older workers, to be around 0.79. Our estimates therefore imply significant complementarity between younger and old employees.
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| 32. |
- Lanot, Gauthier, et al.
(författare)
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The price elasticity of electricity demand when marginal incentives are very large
- 2020
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Rapport (övrigt vetenskapligt/konstnärligt)abstract
- Using unique data on Swedish households, we measure the price elas- ticity of electricity demand for households facing a mandatory non-linear distribution tariffs where households are charged based on their maximum consumption during a month, and where the marginal incentives are very large. We estimate the price elasticity using both 2SLS and bunching esti- mators, and we find that the price elasticity is smaller than what previous literature on electricity demand have found. Furthermore, we illustrate why charging households based on maxi- mum consumption during a month leads to weak incentives in the end of the month, and discuss alternative tariff designs.
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| 33. |
- Lanot, Gauthier, et al.
(författare)
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The price elasticity of electricity demand when marginal incentives are very large
- 2021
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Ingår i: Energy Economics. - : Elsevier. - 0140-9883 .- 1873-6181. ; 104
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Tidskriftsartikel (refereegranskat)abstract
- Using unique data on Swedish households, we measure the price elasticity of electricity demand for households facing a mandatory non-linear distribution tariff, where households are charged based on their maximum consumption during a month, and where the marginal incentives are very large. We estimate the price elasticity using both 2SLS and bunching estimators, and we find that the price elasticity is smaller than what many previous studies on electricity demand have found.We show that the 2SLS estimates are not robust to changes to the set of controls or to the sample definition, while the bunching estimates suggest that the price elasticity of electricity demand is small in response to the large marginal incentives.Furthermore, we illustrate why charging households based on maximum consumption during a month leads to weak incentives in the end of the month, and discuss alternative tariff designs.
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| 34. |
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| 35. |
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| 36. |
- Lanot, Gauthier, 1965-, et al.
(författare)
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Who really wants to be a millionaire? : estimates of risk aversion from gameshow data
- 2014
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Ingår i: Journal of applied econometrics (Chichester, England). - : John Wiley & Sons. - 0883-7252 .- 1099-1255. ; 29:6, s. 861-879
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Tidskriftsartikel (refereegranskat)abstract
- This paper estimates the degree of risk aversion from one of the most popular TV gameshows ever. The format of the show is straightforward; it involves no strategic decision making; we have a large number of observations; and the prizes are cash, which is paid immediately and covers a large range: from 100 pound up to 1 pound million. We provide non-parametric estimates of the utility function and then we test some parametric restrictions. We find that, although the restriction to CRRA utility is statistically rejected, a log function approximates the utility function quite well over a large range of potential winnings.
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| 37. |
- Naka, Poontavika, et al.
(författare)
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A multiple state model for the working-age disabled population using cross-sectional data
- 2020
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Ingår i: Scandinavian Actuarial Journal. - : Taylor & Francis. - 0346-1238 .- 1651-2030. ; 8, s. 700-717
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Tidskriftsartikel (refereegranskat)abstract
- A multiple state model describes the transitions of the disability risk among the states of active, inactive and dead. Ideally, estimations of transition probabilities and transition intensities rely on longitudinal data; however, most of the national surveys of disability are based on cross-sectional data measuring the disabled status of an individual at one point in time. This paper aims to propose a generic method of the estimation of the expected transition probabilities when the model allows recovery from disability using the UK cross-sectional data. The disability prevalence rates are modelled by taking into consideration the effect of age and time. Under some plausible assumptions concerning the death rates among inactive and active people, the estimated prevalence rates of disability are used to decompose survival probabilities in each state.
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| 38. |
- Sousounis, Panos, et al.
(författare)
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Minimum wage effects on reservation wages
- 2022
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Ingår i: Journal of Labor Research. - : Springer. - 0195-3613 .- 1936-4768. ; 43, s. 415-439
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Tidskriftsartikel (refereegranskat)abstract
- Reservation wages are part of the transmission mechanism between minimum wages and unemployment via the labour force participation decision. The limited available empirical evidence on the relationship between reservation wages and legal minimum wages suggest that individuals use minimum wages as benchmarks against which their reservation wages are set. This has a profound behavioural effect that may encourage individuals to either enter the labour force or price themselves out of potential employment. We employ a fuzzy regression discontinuity design to explore the influence of minimum wages on reservation wages. Our findings suggest that the behavioural response is too small to be extracted from the variability of the reservation wage data. For policy makers this finding is important. While minimum wages raise earnings and living standards, they can push some workers out of the labour force by increasing their reservation wage beyond the minimum. We do not find any evidence of such a response of the reservation wage of jobseekers to the minimum wage in the UK.
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| 39. |
- Sousounis, Panos, et al.
(författare)
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Social networks and unemployment exit in Great Britain
- 2018
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Ingår i: International Journal of Social Economics. - 0306-8293 .- 1758-6712. ; 45:8, s. 1205-1226
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Tidskriftsartikel (refereegranskat)abstract
- Purpose: The purpose of this paper is to examine the effect employed friends have on the probability of exiting unemployment of an unemployed worker according to his/her educational (skill) level.Design/methodology/approach: In common with studies on unemployment duration, this paper uses a discrete-time hazard model.Findings: The paper finds that the conditional probability of finding work is between 24 and 34 per cent higher per period for each additional employed friend for job seekers with intermediate skills.Social implications: These results are of interest since they suggest that the reach of national employment agencies could extend beyond individuals in direct contact with first-line employment support bureaus.Originality/value: Because of the lack of appropriate longitudinal information, the majority of empirical studies in the area assess the influence of social networks on employment status using proxy measures of social interactions. The current study contributes to the very limited empirical literature of the influence of social networks on job attainment using direct measures of social structures.
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| 40. |
- Vega, Alejandro, 1986-
(författare)
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Essays on health, labor market behavior, and economic incentives
- 2024
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Doktorsavhandling (övrigt vetenskapligt/konstnärligt)abstract
- Paper [1] analyzes how the labor force participation changes in response to major health shocks, such as new cancer diagnoses, heart attacks, and strokes, in middle-aged to elderly Mexican couples, and how the spouses interact in their responses. The data originates from the Mexican Health and Aging Study and provides information on how couples coordinate their labor market activities in response to major health shocks. The results show that women’s labor force participation is negatively affected by a major health shock to their husbands. In contrast, men’s labor force participation does not change significantly in response to a major health shock to their wives.Paper [2] focuses on the correlation between negative health shocks and the households’ share of wealth held in risky assets. By using U.S. data from the Health and Retirement Study, we try to establish a link between negative health shocks and financial outcomes such as the household’s probability of owning risky assets and the share of risky assets held. We define a recent negative health shock to include cancer or malignant tumour diagnoses, stroke or transient ischemic attack, heart attack, coronary heart disease, angina, congestive heart failure, or other heart problems. We find tha tthe probability of owning risky assets and the share of risky assets are significantly lower among households where the women has experienced a negative health shock. In contrast, neither thep robability of owning risky assets nor the share of risky assets held by the household are significantly associated with a negative health shock to the man.Paper [3] investigates whether job loss can cause symptoms of depression in later life. We focus on couples aged 50 or older. We use data from the Health and Retirement Study, which provides longitudinal information about changes in labor market status and mental health outcomes among respondents and their spouses in the United States. To deal with potential reverse causality problems, we utilize data on job loss resulting from business closures. We find that job loss can lead to depressive symptoms for the affected individual’s partner. The effects are gendered, as women are negatively affected by job losses experienced by their husbands, but we do not observe such harmful effects among men whose wives lose their jobs. We also show how the effects of job loss vary across couples with differing levels of economic resources and health care needs, as well as differential access tohealth care.Paper [4] estimates the labor supply response to an increase in the marginal wage rate among middle-aged to elderly Mexican women. Using data from the National Survey of Occupation and Employment, I find that an increase in the marginal wage rate is associated with an increase in worked hours. The results suggest that the marginal wage rate elasticities are larger for older women than for their younger counterparts.
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