Economists Online Collection & RePEc

Health and Wealth on the Roller-Coaster: Ireland, 2003-2011

2013-05-22T11:32:43Z

Health and Wealth on the Roller-Coaster: Ireland, 2003-2011 Madden, David (David Patrick) This paper reviews developments in income and health poverty in Ireland over the 2003-2011 period using data from the Survey of Income and Living Conditions (SILC). It also examines developments in the correlation between the two. Income poverty fell up to and including 2009, after which this trend is reversed. Health poverty shows less of a trend over the period though there is some evidence of a reduction in health inequality from 2006. Movements in bi-dimensional poverty are mostly driven by income poverty, but there is evidence of a reduction in the correlation between health and income poverty over the period.

Great Leap, Great Famine

2013-04-22T11:52:19Z

Great Leap, Great Famine Ó Gráda, Cormac The paper is an extended review of two recent books on the Great Chinese Famine of 1959-61.

The Poverty Effects of a “Fat-Tax” in Ireland

2013-04-22T11:50:18Z

The Poverty Effects of a “Fat-Tax” in Ireland Madden, David (David Patrick) To combat growing levels of obesity, health related taxes have been suggested with taxes on foods high in fat or sugar. Such taxes have been criticised on the basis of their regressivity and potentially adverse impact upon poverty. This paper analyses the effect of such taxes on a range of poverty measures and also examines the effect of a revenue-neutral tax subsidy mix with a tax on unhealthy food combined with a subsidy on more healthy food. Using Irish expenditure data, the results indicate that taxes on high fat/sugar goods on their own will be regressive but that a tax-subsidy combination can be broadly neutral with respect to poverty.

Eating People is Wrong: Famine’s Darkest Secret?

2013-04-22T11:53:07Z

Eating People is Wrong: Famine’s Darkest Secret? Ó Gráda, Cormac Cannibalism is one of our darkest secrets and taboos. It is the ultimate measure of the resilience or otherwise of civilizational processes to extreme conditions. How common was cannibalism in times of famine in the past? Both the nature of the evidence for famine cannibalism and the silences about it challenge the empirical historian to the limit. After a review of the global historiography, this paper attempts to assess the evidence for cannibalism during Ireland’s many famines, culminating in the Great Irish Famine of the 1840s.

Self-reported and measured BMI in Ireland: should we adjust the obesity thresholds?

2013-04-08T15:30:05Z

Self-reported and measured BMI in Ireland: should we adjust the obesity thresholds? Madden, David (David Patrick) Using the nationally representative Slan dataset of 2007 we analyse the relationship between self-reported and measured BMI. We find that self-reported BMI significantly underestimates obesity rates and suggest that the traditional threshold of 30 should be adjusted downwards. We outline a number of approaches to choose the optimal threshold and results suggest that the new obesity threshold for self-reported BMI could be as low as 26.

Poverty-Reducing Directions of Indirect Marginal Tax Reforms in Ireland

2013-02-07T12:18:54Z

Poverty-Reducing Directions of Indirect Marginal Tax Reforms in Ireland Are, Wasiu Adekunle The composition of tax revenue in Ireland had changed dramatically over the past decade, with indirect taxes accounting for a large share of total tax revenue. This shift towards indirect taxation more than direct taxation tends to put excessive burden on the poor, thereby raising the concern about equity implications of the Irish indirect tax systems. In this paper, we utilize Consumption Dominance curve techniques to analyse the impact of marginal indirect tax changes on poverty in Ireland , using the Irish Household Budget Survey data of 1999 and 2005 periods. Using this technique, which is based on the theory of stochastic dominance, we examined the pairwise comparison of different combinations of commodities for both the overall population and the subgroups of population. The technique helps us to identify the directions of indirect marginal tax changes which will reduce poverty for some selected commodities over a broad class of poverty measures and poverty lines.

Growth and Income Redistribution Components of Changes in Poverty: A Decomposition Analysis for Ireland, 1987-2005

2013-01-14T17:24:18Z

Growth and Income Redistribution Components of Changes in Poverty: A Decomposition Analysis for Ireland, 1987-2005 Are, Wasiu Adekunle This study analysed the contribution of economic growth and redistribution components to aggregate poverty changes in Ireland from 1987-2005, using the Shapley value decomposition approach. The analysis used the household disposable income data from the Household Budget Survey to calculate poverty indices. The result of the Shapley value decomposition of poverty changes into growth and redistribution components revealed that the growth component dominates the redistribution component in bringing about the decline in poverty. This suggests that the drastic fall in absolute poverty over the survey period could be attributed to the increase in the household mean income rather than the redistributive policies of government transfer and income tax systems. We also investigated the extent to which economic growth experienced over the survey period has been pro-poor, by using the Growth Incidence Curve proposed by Ravallion and Chen (2003). It was found that economic growth was slightly pro-poor between 1987 and 1994 and generally anti-poor between 1994 and 1999.

TARGET2 and Central Bank Balance Sheets

2012-11-26T17:02:08Z

TARGET2 and Central Bank Balance Sheets Whelan, Karl The Eurosystem’s TARGET2 payments system has featured heavily in academic and popular discussions in recent years. Much of this commentary had described the system as being responsible for a “secret bailout” of Europe’s periphery which has led to huge credit risks for the Bundesbank should the euro break up. This paper discusses the TARGET2 system, focusing in particular on how it impacts the balance sheets of the central banks that participate in the system. It concludes that the TARGET2 is largely innocent of the charges that have been levelled against it. Arguments that TARGET2 facilitated a bailout of the periphery or that the system is playing a key role in facilitating peripheral current account deficits turn out to be wide of the mark. Risks to Germany due to the loss of TARGET2‐related revenues for the Bundesbank after a euro break‐up turn out to relatively small because these revenues are limited and because there are potentially large gains from new seigniorage revenues in this scenario. Many criticisms involving TARGET2 turn out, on closer examination, to be criticisms of the ECB’s core principle of treating credit institutions across the euro area in an equal manner. Proposals that the ECB adopt procedures that discriminate between banks in different countries (or that restrict the operation of payments systems in certain countries) are likely to be incompatible with the continuation of the euro as a common currency.

Analysing Determinants of Match Attendance in the European Rugby Cup

2012-11-08T15:10:43Z

Analysing Determinants of Match Attendance in the European Rugby Cup Massey, Patrick; Massey, Shane; Hogan, Vincent (Vincent Peter) The economic literature on professional sports leagues suggests supporters’ utility depends on uncertainty of outcome (competitive balance) and the quality of play. Unlike soccer, where the Champions League is dominated by teams from larger countries, our analysis indicates that the ERC exhibits high degrees of both dynamic and inter-league competitive balance. Using data from 1,096 matches played over 17 seasons, we analyse match attendances in the pool stages of the European Rugby Cup (ERC), a competition that involves teams from the three main European rugby leagues. The results indicate that the quality of the home team is the main determinant of match attendances, although a strong visiting team also raises attendances. Medium-term (seasonal) uncertainty, which has received less attention in the literature, appears far more important than short-run (match) uncertainty. Measures designed to make matches more attractive, e.g. bonus points for high scoring, appear to have had little effect on attendances.

Competitive Balance and Match Attendance in European Rugby Union Leagues

2012-11-02T17:45:46Z

Competitive Balance and Match Attendance in European Rugby Union Leagues Massey, Patrick; Massey, Shane; Hogan, Vincent (Vincent Peter) The paper analyses the impact of the relatively belated move to professionalism in Rugby Union. We use data on match attendance for 3,667 fixtures in European club Rugby over 15 seasons to estimate the effect of competitive balance on attendance. We find that (short- and medium-term) competitive balance has a large and statistically significant effect. However, this effect is smaller in magnitude than the effect brought about by the other aspects of the fixture with the strength of the home team being the single most important influence on attendances.

Don't Stress: Early Life Conditions, Hypertension, and Selection into Associated Risk Factors

2012-11-02T17:18:33Z

Don't Stress: Early Life Conditions, Hypertension, and Selection into Associated Risk Factors McGovern, Mark Early life conditions have been linked to various domains of later life health, including cardiovascular outcomes. Using life history data from 13 European countries, I find that childhood socioeconomic status and measures of childhood health are related to hypertension, although there is cross country heterogeneity in these effects. I account for potential omitted variable bias by using aggregate measures of public health at birth, which are plausibly exogenous to the individual. I find that infant mortality at birth is positively related to hypertension, even allowing for cohort effects, and controlling for GDP at birth. Results imply that improvements in early life conditions in Europe led to an overall reduction in the hypertension rate of between 3 and 6 percentage points, for the cohort born 1931-1935, relative to the cohort born 1956-1960. An alternative strand of literature in epidemiology links contemporaneous factors, such as work place environment, to heart disease. However, theories of life cycle decision making suggest that individuals may be selected into these adverse environments and behaviours on the basis of their initial conditions. I demonstrate a strong association between early environment and these risk factors. Results imply that these should therefore be viewed as outcomes which lie on the causal pathway between initial conditions and later outcomes, in which case ignoring this selection will misattribute at least part of the effects of early life environment to current circumstance. This has important policy implications for targeting hypertension as it indicates that emphasis should also be placed on combatting disadvantage across the life course, rather than just factors which only manifest themselves in adulthood.

CCCTB 4 EU? SA vs. FA w/ FTA

2012-10-16T16:24:55Z

CCCTB 4 EU? SA vs. FA w/ FTA Davies, Ronald B. Since its conception, some within the European Union have expressed concerns over the ability of multinationals to avoid taxation by undertaking transfer pricing to shift profits towards low tax locations. These concerns have been growing, leading to a renewed call for a common consolidated corporate tax base wherein profits are allocated to nations according to a formula rather than firms’ internal prices. This paper analyzes the merits of such a shift in taxation. In particular, it is shown that, given tax rates, implementing formula apportionment can result in greater tax revenues and less intense tax competition particularly for lower trade barriers. However, this is not always the case and depends on parameter values, including those describing the extent of economic integration.

Export mode, Trade Costs, and Productivity Sorting

2012-10-16T16:19:24Z

Export mode, Trade Costs, and Productivity Sorting Davies, Ronald B.; Jeppesen, Tine In this paper we directly test the proposed productivity hierarchy of direct, indirect and non-exporters using firm-level data from 105 developing and transition countries. Using both regression analysis and propensity score matching, we find strong evidence to suggest that direct exporters are on average more productive than both indirect and non-exporters. However, only the results obtained using regression analysis support a similar ranking between indirect and non-exporters. Furthermore, we test the underlying relationship between source-specific fixed trade costs and the average productivity differences between the three firm-types. We find a significant and positive relation between such costs and the average productivity premium of direct exporters only. While other studies have shown that exports by trade intermediaries increase with destination-specific fixed costs, our results suggest that this is also true for source-specific costs, as an increase in the average productivity of direct exporters indicate that a larger share of less productive direct exporters choose to make use of a trade intermediary as export costs rise.

The Labor-Market Returns to Community College Degrees, Diplomas, and Certificates

2012-10-02T14:12:52Z

The Labor-Market Returns to Community College Degrees, Diplomas, and Certificates Jepsen, Christopher; Troske, Kenneth; Coomes, Paul This paper provides among the first rigorous estimates of the labor-market returns to community college certificates and diplomas, as well as estimating the returns to the more commonly-studied associate’s degrees. Using administrative data from Kentucky, we estimate panel-data models that control for differences among students in pre-college earnings and educational aspirations. Associate’s degrees and diplomas have quarterly earnings returns of nearly $2,400 for women and $1,500 for men, compared with much smaller returns for certificates. There is substantial heterogeneity in returns across fields of study. Degrees, diplomas, and – for women – certificates correspond with higher levels of employment.

Estimating the External Returns to Education: Evidence from China

2012-09-27T14:12:09Z

Estimating the External Returns to Education: Evidence from China Fan, Wen; Ma, Yuanyuan Good understanding on the human capital externalities is important for both policy makers and social science researchers. Economists have speculated for at least a century that the social returns to education may exceed the private returns. In this paper, using the longitudinal data from China Health and Nutrition Survey (CHNS), we examine how individual wage changes associated with the share of college graduates in the same province across years for a person who has never moved by implementing individual fixed effects estimates. The individual fixed effect model shows that the external returns to education in China appear to be negative and on the order of -2%, which might be biased by potential endogeneity. Concerned with this problem, we then implement the IV fixed effect estimates and find positive external returns to education at about 10%. We also find this returns differ across individual heterogeneity.

Playing by the Rules? The Development of an Amended Index to Measure the Impact of Rules of Origin on Intra-PTA Trade Flows

2012-09-25T15:27:33Z

Playing by the Rules? The Development of an Amended Index to Measure the Impact of Rules of Origin on Intra-PTA Trade Flows Kelleher, Sinéad Rules of Origin (RoO) are essential components of any preferential trade agreement (PTA) short of a full customs union. The recent proliferation of PTAs has led to increased interest in the effects of RoO with empirical estimates consistently showing that they act as barriers to intra-PTA trade. However, this paper argues that the indices of RoO restrictiveness currently used in empirical analysis are flawed as they focus solely on product specific RoO and do not incorporate information on regime wide provisions, that is, those rules that apply across all goods in a particular agreement. As such, they do not capture fully the effective restrictiveness of a given RoO. In order to address this issue, this paper weights the Harris Index of RoO restrictiveness by three regime wide provisions; the size of the Cumulation Zone, the de minimis allowance, and certification type. The resulting new measure, the Regime Weighted Harris Index (RWHI), is then each used in both OLS and IV regressions to measure the impact of RoO on intra-PTA trade flows. Across an eleven year panel of 90 country-pairs, a negative effect of RoO on intra-PTA trade is found using OLS. However, the results of an IV regression suggest that the situation is somewhat more complicated, with RoO actually promoting trade flows in certain product groups. This is the first attempt in the literature to develop an instrument for RoO restrictiveness which constitutes a second source of value added for this paper.

The Socioeconomic Determinants of Mental Stress in Ireland

2012-09-25T15:18:59Z

The Socioeconomic Determinants of Mental Stress in Ireland Madden, David (David Patrick) This paper reviews Irish evidence on the link between socioeconomic factors and various measures of mental stress and well-being. The paper reviews both cross-section and time-series studies and finds that of all socioeconomic determinants, the most consistent role is found for unemployment. In general, stronger results are found for males than for females, but the time series evidence suggests that the relationship between suicide and unemployment appears to be weakening.

Foreign Direct Investment and The Ease of Doing Business

2012-09-03T14:18:19Z

Foreign Direct Investment and The Ease of Doing Business Corcoran, Adrian; Gillanders, Robert This paper examines the effect that a country’s business regulatory environment has on the amount of foreign direct investment it attracts. We use the World Bank’s Ease of Doing Business ranking to capture the costs that firms face when operating in a country. Several interesting results emerge. Firstly, the Doing Business rank is highly significant when included in a standard empirical FDI model estimated on data averaged over the period 2004-2009. Secondly, the significance of the overall Doing Business is driven by the Ease of Trading Across Borders component. We argue that this is a more intuitively appealing proxy for trade costs than the often used openness variable. The relationship does not seem to exist for the World’s poorest region, Sub-Saharan Africa, or for the OECD. Finally, we find no evidence that the ease of doing business of nearby countries has an effect on the FDI that a country gets in general. However, in terms of attracting FDI from the US, it helps to be near countries with good trade regulation and bad regulation in other respects.

Incumbent-quality advantage and counterfactual electoral stagnation in the U.S. Senate

2012-09-03T14:11:27Z

Incumbent-quality advantage and counterfactual electoral stagnation in the U.S. Senate Pastine, Ivan; Pastine, Tuvana; Redmond, Paul This paper presents a simple statistical exercise to provide a benchmark for the degree of electoral stagnation without direct officeholder benefits or challenger scare-off effects. Here electoral stagnation arises solely due to incumbent-quality advantage where the higher quality candidate wins the election. The simulation is calibrated using the observed drop-out rates in the U.S. Senate. From 1946 to 2010, the observed incumbent reelection rate is 81.7 percent; the benchmark with incumbent-quality advantage alone is able to generate a reelection rate of 78.2 percent. In the sub-sample from 1946 to 1978, the reelection rate from the simulation is almost identical to the observed. The rates diverge in the second part of the sub-sample from 1980 to 2010, possibly indicating an increase in electoral stagnation due to incumbency advantage arising for reasons other than incumbent-quality advantage.

Breaking the cycle of deprivation : an experimental evaluation of an early childhood intervention

2012-09-03T14:05:59Z

Breaking the cycle of deprivation : an experimental evaluation of an early childhood intervention Doyle, Orla Deprivation early in life has multiple long term consequences for both the individual and society. An increasing body of evidence finds that targeted, early interventions aimed at at-risk children and their families can reduce socioeconomic inequalities in children’s skills and capabilities. This paper describes a randomised control trial (RCT) evaluation of a five-year preventative programme which aims to improve the school readiness skills of socioeconomically disadvantaged children. The Preparing for Life (PFL) programme is one of the first studies in Ireland to use random assignment to experimentally modify the environment of high risk families and track its impact over time. This paper describes the design and motivation for the study, the randomisation procedure adopted and the baseline data collected. Using Monte Carlo permutation testing, it finds that the randomisation procedure was successful as there are no systematic differences between the treatment and control groups at baseline. This indicates that future analysis of treatment effects over the course of the five year evaluation can be causally attributed to the programme and used to determine the impact of Preparing for Life on children’s school readiness skills.

Ballot order effects : an analysis of Irish general elections

2012-09-03T14:00:59Z

Ballot order effects : an analysis of Irish general elections Regan, John This paper presents evidence of ballot order effects in Irish General Elections, where candidates are listed in alphabetical order. Data relating to elections from 1977 to 2011 suggest the effect is significant in a statistical sense and in magnitude. The nature of the Irish electoral system sees voters cast preferences for candidates, and as a result a greater level of information regarding voters becomes available. Various fixed effects are added to control for constituencies, candidates and political parties.

The relationship between low birthweight and socioeconomic status in Ireland

2012-09-03T13:53:53Z

The relationship between low birthweight and socioeconomic status in Ireland Madden, David (David Patrick) There is now fairly substantial evidence of a socioeconomic gradient in low birthweight for developed countries. The standard summary statistic for this gradient is the concentration index. Using data from the recently published Growing Up in Ireland survey, this paper calculates this index for low birthweight arising from preterm and intra-uterine-growth-retardation. It also carries out a decomposition of this index for the different sources of low birthweight and finds that income inequality appears to be less important for the case of preterm births, while fathers education and local environmental conditions appear to be more relevant for IUGR. The application of the standard Blinder-Oaxaca decomposition also indicates that the socioeconomic gradient for all sources of birthweight appear to arise owing to different characteristics of rich and poor, and not because the return to characteristics differ between rich and poor.

Agricultural output, calories and living standards in England before and during the Industrial Revolution

2012-07-24T15:46:33Z

Agricultural output, calories and living standards in England before and during the Industrial Revolution Kelly, Morgan; Ó Gráda, Cormac This paper surveys the results of four recent, separate attempts at estimating agricultural output and food availability in England and Wales at points between the Middle Ages and the Industrial Revolution. It highlights their contrasting implications for trends in economic growth and nutritional status over time. It also offers some suggestions aimed at narrowing gaps between the evidence and how it has been interpreted.

The waning of the little ice age

2012-07-24T15:37:30Z

The waning of the little ice age Kelly, Morgan; Ó Gráda, Cormac The ramifications of the Little Ice Age, a period of cooling temperatures straddling several centuries in northwestern Europe, reach far beyond meteorology into economic, political, and cultural history. The LIA has spawned a series of resonant images that range from frost fairs to contracting glaciers, and from disappearing vineyards to disappearing Viking colonies. This paper takes issue with these images, and argues that the phenomena they describe can be explained without resort to climate change.

Greenfield FDI and skill upgrading

2012-07-24T15:27:55Z

Greenfield FDI and skill upgrading Davies, Ronald B.; Desbordesz, Rodolphe Globalisation is one of the primary accused culprits of growing income inequality in the developed world. In particular, outbound foreign direct investment (FDI) is often associated with general “skill upgrading" in the home country, that is, a shift in relative labour demand from low skilled workers towards more skilled workers. Nevertheless, the empirical evidence indicates that such effects are small at best, especially in contrast to those for overall trade in intermediates (which includes both intra-firm trade and foreign outsourcing). In response, we utilise a proprietary dataset on greenfield FDI. In contrast to M&A FDI, which can represent acquisition of new technologies or elimination of competitors, greenfield FDI may be more closely linked to skill upgrading, especially when its done to take advantage of international differences in factor prices. Given that our data delineate FDI by function as well as by destination country, we are able to capture the different motives of FDI and to account for the fact that different functions in different countries may substitute for different skill levels at home. Using these data in conjunction with industry-level data on seventeen developed home countries, we find that greenfield FDI results in polarised skill upgrading, i.e. an increase in the relative share of employment and compensation of the most skilled workers to the detriment of the medium skilled workers. This impact is strongest for support services (e.g. call centres), knowledge services (e.g. R&D), and retail FDI with little indication of an impact from FDI in other functions. Our estimates suggest that the change in the high skilled compensation share explained by support services is of the same order of magnitude as what is found in other studies for trade in services. Unlike those studies, however, we find that demand for medium skilled workers falls from outbound FDI whereas that of the lowest skilled workers remains unchanged. Thus, in contrast to overall trade in services where globalisation leads to increased income inequality between the lowest skilled workers and other groups, increased outbound FDI leads to an increased gap between the most skilled and the moderately skilled workers. FDI then has parallels to the results from the labour literature estimating the non-monotonic impacts on the demand for skills of computerisation and service offshoring.

The influence of macroeconomic conditions and institutional quality on national levels of life satisfaction

2012-07-24T15:17:39Z

The influence of macroeconomic conditions and institutional quality on national levels of life satisfaction Walsh, Brendan M. Answers to the Eurobarometer question on Life Satisfaction are used to explore the effects of macroeconomic performance and institutional quality on average levels of self-assessed well-being in the countries of the enlarged European Union between 2004 and 2011. It is found that variations in national levels of life satisfaction can largely be accounted by a small number of socio-economic indicators. Life satisfaction is lowest in poor, corrupt countries where income inequality is pronounced. The adverse effect of higher unemployment on life satisfaction is partially offset by the positive impact of lower inflation. However, even when these factors are allowed for, significant country-level differences persist.

The formal sector wage premium and firm size for self-employed workers

2012-07-24T14:03:23Z

The formal sector wage premium and firm size for self-employed workers Bargain, Olivier; Badaoui, Eliane; Kwenda, Prudence; Strobl, Eric; Walsh, Frank We develop a model where workers may enter self-employment or search for jobs as employees and where there is heterogeneity across workers’ managerial ability. Workers with higher skills will manage larger firms while workers with low managerial ability will run smaller firms and will be in self-employment only when they cannot find a salaried job. For these workers self-employment is a secondary/informal form of employment. The Burdett and Mortensen (1998) equilibrium search model is used for illustration as a special case of our more general framework. Empirical evidence from Mexico is provided and demonstrates that firm size wage effects for employees and self-employed workers are broadly consistent with the model.

ELA, promissory notes and all that : the fiscal costs of Anglo Irish Bank

2012-07-24T13:56:41Z

ELA, promissory notes and all that : the fiscal costs of Anglo Irish Bank Whelan, Karl This is a briefing paper the author distributed to the Irish parliamentary committee responsible for finance and public expenditure. It describes the balance sheet of Irish Bank Resolution Corporation, the organisation that was formed by combining Anglo Irish Bank and Irish Nationwide Buildings Society. The nature of the long-run cost to the Irish state of taking over the liabilities of these institutions is outlined and suggestions are made for reducing these costs.

Methods for studying dominance and inequality in population health

2012-07-19T16:09:46Z

Methods for studying dominance and inequality in population health Madden, David (David Patrick) This paper reviews methods for studying dominance and inequality in health economics. It concentrates on “pure inequality” as opposed to inequality which is related to income or some other measure of household resources. The paper reviews methods for cases when health can be measured cardinally and ordinally. There is also a brief review of statistical inference in this area.

Improving the eurosystem for old and new members

2012-07-19T16:04:02Z

Improving the eurosystem for old and new members McCarthy, Colm

Ireland’s European crisis : staying solvent in the Eurozone

2012-07-19T15:57:21Z

Ireland’s European crisis : staying solvent in the Eurozone McCarthy, Colm A popular narrative amongst European policymakers is that Eurozone members facing problems in the bond market are paying the price for past budgetary excess. Fiscal consolidation in these countries is seen as the principal remedy for the crisis. It is clear however that Ireland’s problems derive mainly from a banking bust exacerbated by weaknesses in the design of Europe’s monetary union and the policy response of both the Irish authorities and the European Central Bank. From the Euro’s inception in 1999 up to 2007, both debt and deficit ratios in Ireland were comfortably within the Stability and Growth Pact ceilings. The gross debt ratio was only 25% of GDP at the end of 2007. The Stability and Growth Pact was the only macroprudential measure in place at Eurozone level, and Irish adherence reflected public finances flattered by a credit-fuelled property bubble. The banks experienced intense liquidity pressures in September 2008 and the Irish government provided a blanket liability guarantee. The banks were in reality badly insolvent, the bank guarantee has cost 40% of GDP and Ireland was forced from the bond market and into an EU/IMF programme just over two years later. There can be no presumption that it will emerge, and re-enter the bond market, on schedule at the end of 2013. This paper argues that the incomplete design of the currency union, with free capital movement and trans-border banking, but no centralised banking policy, contributed to the Irish debacle. The absence of bank resolution and any centralised system of liability insurance threw the burden of bank rescue on sovereigns. Countries in currency union are vulnerable to sovereign default, since they must borrow in what is, in effect, a foreign currency. Resort to official lenders enjoying seniority, combined with ECB insistence on sovereign repayment of bank senior bondholders, even in banks insolvent many times over, has undermined confidence in Irish sovereign debt. Closer fiscal union may prove necessary if the Eurozone is to survive. To avoid future sovereign debt crises, there is also a need for centralised bank supervision and resolution, as well as for a centralised system of liability insurance for banks. What happened in Ireland shows that sticking to purely fiscal rules is no guarantee of solvency for the sovereign in a currency union with inadequate mechanisms for the prevention and resolution of banking crises.

Fetal origins, childhood development, and famine: a bibliography and literature review

2012-06-15T16:11:38Z

Fetal origins, childhood development, and famine: a bibliography and literature review Ó Gráda, Cormac The human costs of famines outlast the famines themselves. An increasing body of research points to their adverse long-run consequences for those born or in utero during them. This paper offers an introduction to the burgeoning literature on fetal origins and famine through a review of research on one well-known case study and a bibliography of published work in the field generally.

Well-being and economic conditions in Ireland

2012-06-15T16:03:53Z

Well-being and economic conditions in Ireland Walsh, Brendan M. By European standards Ireland ranks high on many non-economic indicators of well-being. This paper explores how macroeconomic conditions have affected a range of these indicators. Time series data are used to explore the association between unemployment, inflation, and the level and growth rate of real income on the one hand and measures of subjective well-being and markers of mental health on the other. Over the longer term, 1975-2011, there was no upward trend in self-reported life satisfaction despite the secular improvement in living standards. While higher unemployment reduced life satisfaction over the first half of this period, its effect was weaker in later years. The rate of inflation has not had a significant effect on life satisfaction. There is no evidence that admission rates to psychiatric hospitals are affected by changes in economic conditions. However, higher unemployment is linked to higher suicide rates among younger males, although its effect appears to have weakened during the current recession. Finally, the recent rise in unemployment has had a much smaller impact on the birth rate than that due to the recession of the early 1980s. Overall, the impact of the current recession on the well-being indicators studied here has been surprisingly small.

The mental health cost of corruption: evidence from Sub-Saharan Africa

2012-06-15T15:58:02Z

The mental health cost of corruption: evidence from Sub-Saharan Africa Gillanders, Robert This paper examines the effect that experiencing corruption has on an individual’s mental health using microeconomic data from the Afrobarometer surveys. The results show a statistically significant and economically meaningful effect in both binary and ordered probit models using both an experience of corruption index and a simple binary variable. Having to pay a bribe to obtain documents and permits, to avoid problems with the police or to access medical care emerge as the arenas in which corruption can have a damaging effect on mental health. Some evidence is presented that an individual needs to experience such corruption more than ‘once or twice’ for this effect to become evident.

School tenure and student achievement

2012-06-14T16:32:56Z

School tenure and student achievement Fan, Wen While much empirical work concerns job tenure, this paper introduces the concept of school tenure -- the length of time one student has been in a given school. I examine whether and how school tenure impacts students’ output using rich cohort data on England’s secondary schools. Ordinary Least Squares (OLS) estimates suggest that, on average, students benefit from longer own school tenure but suffer from that of their peers. Using the number of times the student moved school during the academic year as an instrument for school tenure to deal with potential endogeneity, the resulting Two-Stage Least Squares (TSLS) estimates suggest the effects of school tenure are positive and heterogeneous across students. While advantaged students are more likely to gain from own longer school tenure, disadvantaged ones are benefit if their peers have longer tenure.

A race to the bottom in labour standards? An empirical investigation

2012-06-14T16:26:23Z

A race to the bottom in labour standards? An empirical investigation Davies, Ronald B.; Vadlamannati, Krishna Chaitanya Among the many concerns over globalization is that as nations compete for mobile firms, they will relax labour standards as a method of lowering costs and attracting investment. Using spatial estimation on panel data for 148 developing countries over 18 years, we find that the labour standards in one country are positively correlated with the labour standards elsewhere (i.e. a cut in labour standards in other countries reduces labour standards in the country in question). This interdependence is more evident in labour practices (i.e. enforcement) than in labour laws. Further, competition is most fierce in those countries with already low standards.

Change points and temporal dependence in reconstructions of annual temperature : did Europe experience a little Ice Age?

2012-06-12T14:36:20Z

Change points and temporal dependence in reconstructions of annual temperature : did Europe experience a little Ice Age? Kelly, Morgan; Ó Gráda, Cormac We analyze the timing and extent of northern European temperature falls during the Little Ice Age, using standard temperature reconstructions. However, we can find little evidence of long swings or structural breaks in European weather before the twentieth century. Instead, European weather between the fifteenth and nineteenth centuries resembles uncorrelated draws from a distribution with a constant mean (although there are decades of markedly lower summer temperature); with the same behaviour holding more tentatively back to the twelfth century. Our results suggest that the existing consensus about a Little Ice Age in Europe may stem from a Slutsky effect, where the standard climatological practice of smoothing data before analysis gives the spurious appearance of irregular oscillations.

Job lock : evidence from a regression discontinuity design

2012-05-22T15:11:55Z

Job lock : evidence from a regression discontinuity design Fairlie, Robert W.; Kapur, Kanika; Gates, Susan M. Employer-provided health insurance in the United States is suspected of restricting job mobility, resulting in “job lock.” Previous research on job lock finds mixed results using several methodologies. We take a new approach to examine whether employer-based health insurance discourages job mobility by exploiting the discontinuity created at age 65 through the qualification for Medicare. Using a novel procedure for identifying age in months from matched monthly CPS data and a relatively unexplored administration measure of job mobility, we compare job mobility among male workers in the months just prior to turning age 65 to job mobility in the months just after turning age 65. We find no evidence that job mobility increases at the age 65 threshold when Medicare eligibility starts. Our results are robust to different bandwidths, non-linear age profiles, and frequency of age measurement. The upper bounds of 95 percent confidence intervals for these estimates can rule out the existence of any job lock in some cases, and in most cases can rule out the large levels of job lock found in many previous studies in the literature. We also do not find evidence that other factors such as retirement, reduction in hours worked, social security eligibility, pension eligibility, and sample changes confound the results on job mobility in the month individuals turn 65.

Schooling and voter turnout : is there an American exception?

2012-05-09T15:43:13Z

Schooling and voter turnout : is there an American exception? Chevalier, Arnaud; Doyle, Orla One of the most consistent findings in studies of electoral behaviour is that individuals with higher education have a greater propensity to vote. The nature of this relationship is much debated, with US studies generally finding evidence of a causal relationship, while European studies generally reporting no causal effect. To assess whether the US is an exception we rely on an international dataset incorporating 38 countries, the ISSP (International Social Survey Programme) from 1985 to 2010. Both instrumental variable and multi-level modelling approaches reveal that the US is an outlier regarding the relationship between education and voter turnout. Moreover country-specific institutional and economic factors do not explain the heterogeneity in the relationship of interest. Alternatively, we show that disenfranchisement laws in the U.S. mediates the effect of education on voter turnout, such that the education gradient in voting is greater in U.S. States with the harshest disenfranchisement legislature. As such, the observed relationship between education and voting is partly driven by the effect of education on crime.

All-pay contests with constraints

2012-02-22T16:59:44Z

All-pay contests with constraints Pastine, Ivan; Pastine, Tuvana This paper provides simple closed form formulae for players’ expected payoffs in a broad class of all-pay contests where players may have constraints on their actions.

A practical introduction to Stata

2012-02-21T15:11:47Z

A practical introduction to Stata McGovern, Mark This document provides an introduction to the use of Stata. It is designed to be an overview rather than a comprehensive guide, aimed at covering the basic tools necessary for econometric analysis. Topics covered include data management, graphing, regression analysis, binary outcomes, ordered and multinomial regression, time series and panel data. Stata commands are shown in the context of practical examples.

Optimal tariffs with FDI : the evidence

2012-01-30T14:45:43Z

Optimal tariffs with FDI : the evidence Blonigen, Bruce A.; Cole, Matthew T. Recent theoretical work suggests that the presence of foreign direct investment (FDI) lowers a country’s noncooperative Nash tariff. To test this hypothesis, we first adapt the theoretical model formulated by Blanchard (2010) to derive an intuitive, empirically testable equation. This equation is an augmentation of the standard formula equal to the inverse of export supply elasticity. Using constructed estimates of export supply elasticities and measures of FDI, we test this hypothesis with respect to tariffs set by China prior to 2001. We focus on China before its accession into the World Trade Organization (WTO) for two primary reasons: first, China is a recipient of FDI during this time; and second, prior to becoming a WTO member China can be seen as a player in a noncooperative game. We find evidence to suggest that before entering the WTO, China chooses lower tariffs, ceteris paribus, for industries that receive more FDI. This is an important result since having a better understanding of how countries act unilaterally will provide insight into the multilateral cooperative outcome; that is trade negotiations.

Still unequal at birth - birth weight, socioeconomic status and outcomes at age 9

2012-01-12T12:40:02Z

Still unequal at birth - birth weight, socioeconomic status and outcomes at age 9 McGovern, Mark Birth weight is an important aspect of public health which has been linked to increased risk of infant death, increased cost of care, and a range of later life outcomes. Using data from a new Irish cohort study, I document the relationship between birth weight and socioeconomic status. A strong association with maternal education does not appear to be due to the timing of birth or complications during pregnancy, even controlling for a wide range of background characteristics. However, results do suggest intergenerational persistence in the transmission of poor early life conditions. A comparison with the UK Millennium Cohort Study reveals similar social gradients in both countries. Birth weight predicts a number of outcomes at age 9, including test scores, hospital stays and health. An advantage of the data is that I am able to control for a number of typically unmeasured variables. I determine whether parental investments as measured by the quality of interaction with the child, parenting style, or school quality mediate the association between birth weight and later indicators. For test scores, there is evidence of non-linearity. Boys are more adversely affected than girls, and I find that the effects of low birth weight (<2,500g) are particularly strong. I also consider whether there are heterogeneous effects by ability using quantile regression. These results are consistent with a literature which finds that there is a causal relationship between early life conditions and later outcomes.

Simple logit and probit marginal effects in R

2011-12-19T10:56:04Z

Simple logit and probit marginal effects in R Fernihough, Alan This paper outlines a simple routine to calculate the marginal effects of logit and probit regressions using the popular statistical software package R. I compare results obtained using this procedure with those produced using Stata. An extension of this routine to the generalized linear mixed effects regression is also presented.

How far away is an intangible? Services FDI and distance

2011-11-02T16:19:41Z

How far away is an intangible? Services FDI and distance Davies, Ronald B.; Guillin, Amélie Foreign direct investment (FDI) in services has grown significantly in recent years. Evidence of spatial relationships in FDI decisions have been provided for goods manufacturing by utilizing physical distance-based measures of trade costs. This paper investigates spatial interactions for services FDI using several distance measures, including physical distance, genetic distance, and transport time. Across different measures of distance, the traditional determinants of outbound FDI activity remain valid for services. We also find spatial interdependence for services FDI that is generally supportive of complex vertical motivations.

Estimating the return to college in Britain using regression and propensity score matching

2011-10-14T16:04:08Z

Estimating the return to college in Britain using regression and propensity score matching Fan, Wen College graduates tend to earn more than non-graduates but it is difficult to ascertain how much of this empirical association between wages and college degree is due to the causal effect of a college degree and how much is due to unobserved factors that influence both wages and education (e.g. ability). In this paper, I use the 1970 British Cohort Study to examine the college premium for people who have a similar ability level by using a restricted sample of people who are all college eligible but some never attend. Compared to using the full sample, restricting the sample to college-eligible reduces the return to college significantly using both regression and propensity score matching (PSM) estimates. The finding suggests the importance of comparing individuals of similar ability levels when estimating the return to college.

Late conversion : the impact of professionalism on European rugby union

2011-10-14T15:46:59Z

Late conversion : the impact of professionalism on European rugby union Hogan, Vincent (Vincent Peter); Massey, Patrick; Massey, Shane Rugby union only went professional in 1995, much later than other major team sports. League structures and arrangements regarding revenue sharing and salary caps differ between the three main European leagues. We consider the impact of these differences on competitive balance. In addition, unlike soccer, rugby does not require leagues to be organised along national lines, which has enabled the smaller rugby playing countries to establish a joint league. This has prevented a migration of all the best players to larger country leagues as has happened in soccer and resulted in a greater degree of competitive balance in European rugby competitions.

The role and provision of social air services in deregulated air transportation markets

2011-07-26T14:23:15Z

The role and provision of social air services in deregulated air transportation markets Reynolds-Feighan, Aisling J. Social air services continue to be provided by governments in liberalized air transport markets for reasons of regional economic development and social or political integration. Here the service policies for the US, EU and EFTA countries, Australia and Canada are examined and it is argued that policies should rely on market forces in order to obtain social, economic and political goals most economically

Private apartments in Dublin

2011-07-26T14:09:23Z

Private apartments in Dublin Reynolds-Feighan, Aisling J.

Some economic implications of the ageing Irish population

2011-07-25T16:11:33Z

Some economic implications of the ageing Irish population Walsh, Brendan M.