Tax Credits, Income Support and Partnership Decisions

This paper considers the potential impact of welfare benefits on the partnership status of women in the UK. Using recent policy reforms to identify the response rate I find that a £100/week welfare benefit “partnership penalty” reduces the probability of a woman having a partner by seven percentage points. I also use the model to explore the potential effects of the recent Tax Credit reforms on partnership rates; I find that while the 1999 WFTC reform improved partnership incentives this effect was effectively undone by the 2003 WTC/CTC reform.welfare benefits, tax credits, family structure

An Equilibrium Analysis of Marriage, Divorce and Risk-Sharing

This paper considers family formation and reciprocity-based cooperation in the form of sharing of earnings-risk. While risk sharing is one benefit to marriage it is also limited by divorce risk. With search in the marriage market there may be multiple equilibria diering not only in divorce rates but also in the role of marriage in providing informal insurance. Publicly provided insurance, despite potential equilibrium multiplicity, is shown to aect family formation and financial cooperation monotonically. Some aspects of the model are then tested using international survey data and a bivariate probit model with sample selection.Marriage, divorce, risk-sharing

Time-consistent policy and politics: does voting matter when individuals are identical?

We consider the implications of a lack of policy commitment when policies are chosen through a political process and individuals are ex-ante identical. We show that politics, by allowing ex-post distributional tensions to shape policy, can make it possible to sustain non-trivial equilibria in which the commitment problem is alleviated or fully eliminated. How effective politics can be at countering collective commitment problems in homogeneous groups depends on the nature of the political process and on the extent to which private choices are public information

The Political Economy of Post-Compulsory Education Policy with Endogenous Credit Constraints

Altruistic parents, who differ in income, make financial transfers to their children, who differ in ability. The children invest in post-compulsory education, subject to an endogenous credit constraint, and taking policy as given. There are two policy tools: a subsidy to those who participate in education and a proportional income tax. Not all children participate; a larger subsidy encourages participation, and a larger income tax discourages it. The parents, prior to making transfers, vote on policy. A voting equilibrium, if it exists, is such that voters in the two tails of the income distribution support a reduction, while the “middle-class” supports an expansion, of the education subsidy. Public support of education is a policy with regressive elements as it entails, among other things, a redistribution from the poor to the middle-earners. We characterise a local equilibrium analytically, verify its existence numerically, and finally perform a number of comparative statics exercises.

Domestic Abuse: Instrumental Violence and Economics Incentives

A large fraction of domestically abused women report that their partners interfere with their participation in education and employment. As of yet, mainstream economics has not dealt in any systematic way with this phenomenon and its implications for welfare policy. This paper puts forward a theoretical framework that rationalizes why men may use violence “instrumentally” to prevent their partners from entering employment or from increasing hours of work. The model predicts a non-monotonic relationship between the gender wage gap and domestic violence. We explore the implication of this result in the context of various welfare policies. There are unlikely to be any magic bullets or one-size-fit-all solutions when it comes to reducing the incidence of domestic violence. Instead, specific measures and incentives may have to be targeted at different types of households.instrumental partner-violence, non-cooperative family decision-making, welfare policy

The Effect of Education on Marital Status and Partner Characteristics: Evidence from the UK

This paper uses a particular school exit rule previously in effect in England and Wales that allowed students born within the first five months of the academic year to leave school one term earlier than those born later in the year. Focusing on women, we show that those who were required to stay on an extra term more frequently hold some academic qualification. Using having been required to stay on as an exogenous factor affecting academic attainment, we find that holding a (low level) academic qualification has no effect on a women's probability of being married, but increases the probability of her husband holding some academic qualification and being economically active.education, marriage, assortative mating

Stratification, social networks in the labour market, and intergenerational mobility

This paper uses a model of human capital accumulation, labour market distortions, word-of-mouth communication, and community formation to analyse socio-economic stratification, educational choices and intergenerational social mobility. Workers obtain information about job opportunities from individuals in their local environment, implying that the social environment partly determines the expected returns to education. Stratified equilibria, when they exist, are characterised by low intergenerational social mobility and inefficient use of talent. The equilibrium responses to factors that generally encourage education may, in stratified outcomes, be highly asymmetric across socio-economic groups. -- Der Beitrag verwendet ein Model mit Humankapitalakkumulation, Verzerrungen auf dem Arbeitsmarkt, Mund-zu-Mund-Kommunikation und Nachbarschaftsbildung, um sozioökonomische Stratifikation, Bildungsentscheidungen und intergenerationale soziale Mobilität zu analysieren. Arbeitnehmer erhalten Informationen über freie Arbeitsplätze von Individuen in ihrer Umgebung. Dies impliziert, dass der erwartete Ertrag der Bildungsentscheidungen von der sozialen Umgebung abhängig ist. Stratifizierte Gleichgewichte, falls sie existieren, zeichnen sich durch geringe intergenerationale Mobilität und eine ineffizient niedrige Ausschöpfung von Begabungen aus. Die Gleichgewichtsreaktionen auf erhöhte Bildungsanreize können in stratifizierten Gleichgewichten sehr asymmetrisch für verschiedene sozioökonomische Gruppen ausfallen.

Anatomy of a Health Scare: Education, Income and the MMR Controversy in the UK

One theory for why there is an education gradient in health outcomes is that more educated individuals more quickly absorb new health-related information. The measles, mumps, and rubella (MMR) controversy provides a case where, for a short period, some publicized research suggested that the particular childhood vaccine could have serious side-effects. As the controversy unfolded, uptake of the vaccine by more educated parents decreased relative to that of less educated parents, turning a positive education gradient into a negative one. We also consider the response in terms of uptake of other childhood vaccines and purchases of alternatives to the MMR.Childhood vaccinations, health outcomes, education