Journal of Economic Studies

Does marriage pay more than cohabitation? : Table of Contents

Katherin Barg, Miriam Beblo — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – Empirical research has unambiguously shown that married men receive higher wages than unmarried, whereas a wage premium for cohabiters is not as evident yet. This paper aims to exploit the observed difference between the marital and the cohabiting wage premium in Germany to draw conclusions about the sources, typically explained by specialisation (e.g. husbands being more productive because their wives take over household chores) or selection (high earnings potentials being more attractive on the marriage market). Design/methodology/approach – The paper analyzes the cohabiting and the marital wage premium in Germany using a shifting panel design for marriages and move-ins from 1993 to 2004 in the German Socio-Economic Panel. With non-parametric matching models men who get married (treatment group I) are matched with cohabiting respectively single men (control groups) and men who move in with a partner (treatment group II) with singles. Findings – Matching reveals that higher wages are mostly due to positive selection – into marriage as well as into cohabitation. Supplementary analysis of intra-household time use suggests that specialization, if any, is part of the selection process from single to cohabitation to marriage. Originality/value – This is the first application of non-parametric matching in a comparative study of the marital and the cohabiting wage premium and thus provides new insights into their respective sources. It is also the first investigation of family-status-related wage premiums in Germany.

Economic convergence of income distribution worldwide from 1986 to 2000 : Table of Contents

Jhon James Mora Rodriguez, José Javier Núñez Velázquez — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – The purpose of this paper is to discuss the role of Markovian transitions related to the economic convergence among countries. Thus, the paper aims to develop an overview of several classical approaches, including an analysis of fallacies exposed through the literature. Design/methodology/approach – The number of modes in the distribution of the RGDPL for 100 countries in the period from 1986 to 2000 is calculated. Next, the results obtained from the relevant transition matrices are discussed and the existence of twin peaks in the distribution of income is analyzed. Finally, the adequacy of both Markovian and (time) homogeneity hypotheses in connection with the stochastic process that underlies income distribution is studied. Findings – The results across the period 1986-2000 show the evolution of countries into convergence clubs, instead of the existence of economic convergence. Originality/value – The paper discusses two important issues on the convergence hypothesis. First, the discretization process really matters. If quartiles or quintiles are used the ergodic distribution does not show twin peaks because the process shows an equiprobabilistic ergodic (stationary) distribution in the long term. Second, the twin peaks results need a Markov (time) homogeneous chain as a model for the underlying income process, and then Chapman-Kolmogorov's equation must be satisfied. However, the paper finds empirical evidences of failure in such an argument.

Tax evasion and financial repression: a reconsideration using endogenous growth models : Table of Contents

Rangan Gupta, Emmanuel Ziramba — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – This paper aims at developing a theoretical model of a world economy characterized by tax evasion. It seeks to analyze whether financial repression can be explained by tax evasion. Design/methodology/approach – The analysis is performed in overlapping generations dynamic general equilibrium endogenous monetary growth models. Findings – The paper shows that higher degree of tax evasion within a country, resulting from a higher level of corruption and a lower penalty rate, yields higher degrees of financial repression. Practical implications – Financial repression can be explained by tax evasion but under specific conditions. Originality/value – This is the first attempt to analyze financial repression and tax evasion in an endogenous growth model.

Transient products but persistent trade patterns : Table of Contents

James Cassing, Steven Husted — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – This paper aims to combine the authors' findings of widespread bilateral trade-share persistence with some recent empirical evidence of substantial and rapid volatility in the country source of most products in order to extend the implications of this literature in several ways. Design/methodology/approach – The paper focuses on the behavior of aggregate bilateral trade flows for a large number of countries over the period 1980-2000. Findings – The paper infers that countries are frequently switching to very different products in their export bundles to particular destinations. It also argues that the evidence of rapid product turnover in trade is not inconsistent with traditional factor endowment trade pattern predictions, as has been inferred in the literature. Finally it finds that sunk costs in international trade appear to be external to particular products going to particular destinations but internal to the sum total of bilateral trade. Originality/value – The novelty of this paper resides in documenting the remarkably constant bilateral trade shares of 93 countries over the past two decades and the combination of this result with other known trade pattern characteristics to arrive at important new conclusions.

Too much R&D? – vertical differentiation and monopolistic competition : Table of Contents

Jan Kranich — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – This paper aims to discuss whether product research and development (R&D) in developed economies tends to be too high compared with the socially desired level. Design/methodology/approach – In this context, a model of vertical and horizontal product differentiation within the Dixit-Stiglitz framework of monopolistic competition is set up. Firms compete in horizontal attributes of their products, and also in quality that can be controlled by R&D investments. Findings – The paper reveals that in monopolistic-competitive industries, R&D intensity is positively correlated with market concentration. Furthermore, welfare and policy analysis demonstrate an overinvestment in R&D with the result that vertical differentiation is too high and horizontal differentiation is too low. The only effective policy instrument in order to contain welfare losses is a price control of R&D services. Originality/value – Considering the extent of product R&D as well as the political efforts to promote public and private research, this paper scrutinizes its benefit incorporating income and employment effects. Thus, it goes beyond partial-analytical models of the existing industrial organization literature and provides a larger base of political analysis.

Impure public goods and technological interdependencies : Table of Contents

Andreas Löschel, Dirk T.G. Rübbelke — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – This paper aims to investigate empirically the findings of an analytical impure public good model. The impure public good model described in this study allows for the application of different technologies generating public and private characteristics. The influence of the individual technologies on the total level of (impure) public good provision is of main concern in this study. Design/methodology/approach – After the illustration of the impure public good model, the analytical results are compared to the results of a numerical approach based on climate policy in Germany. Findings – The study shows that comparative static analyses do not always generate clear results. Therefore, the numerical approach is helpful to derive unambiguous results. The paper finds that technologies which exclusively generate private characteristics may have significant effects on total impure public good provision, since they may replace the private characteristics of the impure public good. Originality/value – This paper provides useful information on the influence of the individual technologies on the total level of (impure) public good provision.

Currency substitution in selected African countries : Table of Contents

Assandé Désiré Adom, Subhash C. Sharma, A.K.M. Mahbub Morshed — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – This paper aims to investigate the presence of currency substitution in eight African countries. Design/methodology/approach – This study investigates the presence of currency substitution in eight African countries – Egypt, Morocco, Nigeria, Ghana, Kenya, South Africa, Tunisia and Zambia – for the period 1976 to 2005 using both regional and US dollar as anchor currencies. Findings – The paper finds that currency substitution is prevalent in Ghana and Nigeria when CFA franc is used as an anchor currency. However, when US dollar is used as an anchor currency there is no evidence of currency substitution in Ghana, but the presence of currency substitution in Nigeria is still observed. The paper also finds the presence of currency substitution in South Africa, but not in Egypt when the US dollar is the anchor currency. For Kenya, Tunisia and Zambia there is no evidence of currency substitution irrespective of the anchor currencies considered. In the case of Morocco, no evidence of currency substitution is observed when the Egyptian pound is used as anchor currency, but there is weak evidence of currency substitution when the US dollar is considered. Originality/value – This paper provides useful information on the presence of currency substitution in African countries.

Overcoming the limitations of efficiency modeling in the health care foodservice industry : Table of Contents

A. Assaf, K.M. Matawie — Sat Nov 07 08:00:18 GMT 2009

Abstract:
Purpose – This paper aims to reflect on the sources of the technical inefficiency of health care foodservice operations, using a sample of Australian and American hospitals. Design/methodology/approach – The paper applies the stochastic frontier model to reflect on the technical inefficiency and its sources. The advantage of the model is that it allows the simultaneous parameters estimation of technical efficiency as well as the factors that explain variations in technical efficiency. A set of hypotheses are tested to ensure the applicability and suitability of the suggested model. Then the model parameters are estimated, discussed and checked against the theoretical requirements and the literature. Findings – Results show that all the variable coefficients are correctly signed and that the average technical efficiency is around 83 percent for Australia and 80 percent for the USA. Practical implications – The technical efficiency results, according to the introduced model, suggest that health care foodservice operations in both countries are not operating at a full efficient level. The results also reveal that factors such as manager's education, manager's experience, and size have a direct impact on reducing the level of technical inefficiency of these operations. Originality/value – This paper overcomes the limitations of the existing efficiency techniques in the area of health care foodservice and also provides policy implications by emphasizing on the sources of technical inefficiency of health care foodservice operations for Australia and USA.